UNITED STATESU.S. SECURITIES AND EXCHANGE COMMISSION
                                Washington,WASHINGTON, D.C. 20549
                                     FORM 10Q12b-25
                             NOTIFICATION OF LATE FILING
                                     (Check One):

     [ ] Form 10-K  [ ]  Form 20-F  [ ]  11-K  [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                           OF THE SECURITIES EXCHANGE ACT OF 1934Form 10-Q  [ ] Form N-SAR

     For Period Ended:  July 31, 1997

     [ ]  Transition Report on Form 10-K
     [ ]  Transition Report on Form 20-F
     [ ]  Transition Report on Form 11-K
     [ ]  Transition Report on Form 10-Q
     [ ]  Transition Report on Form N-SAR

     For the quarterly period ended October 31, 1996
            
                                           OR

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

          ForTransition Period Ended: __________________________________________
     __________________________________________________________________________


        Nothing in this form shall be  construed to imply that the  transition period fromCommission
     has verified any information contained herein.
     __________________________________________________________________________


        If the  notification relates to _______________    _______________
                   
                              Commission File Number 0-12459a portion of the filing checked above,
     identify the Item(s) to which the notification relates: ___________________
    ___________________________________________________________________________
    __________________________________________________________________________


     Part I - Registrant Information     Part I - Registrant Information
    ___________________________________________________________________________

          Full Name of Registrant:  Biosynergy, Inc.

          _________________________________________________________________
              (Exact nameFormer Name if Applicable:  Not Applicable

          Address of  registrant as specified in its charter)

                     Illinois                         36-2880990            
        __________________________________ ______________________________
           (State or other jurisdiction of        (I.R.S. Employer
          incorporation or organization)          Identification No.)Principal Executive Office  (Street and Number):   1940 EastE.
     Devon Avenue, Elk Grove Village, Illinois 60007
    _________________________________________________________________
        (Address__________________________________________________________________________

     Part II - Rules 12b-25 (b) and (c)     Part II - Rules 12b-25 (b) and (c)
    ___________________________________________________________________________

       If the subject  report could not be filed  without unreasonable effort
   or expense  and the registrant seeks relief pursuant to Rule 12b-25(b), the
   following should be completed.  (Check box if appropriate) [X] Yes [ ] No

       (a)  The  reasons described in reasonable  detail in Part III  of principal executive offices)               (Zip Code)

          Registrant's area codethis
   form could not be eliminated without unreasonable effort or expense;

       (b)  The subject annual report, semi-annual, transition report on Form
   10-K; Form 20-F, 11-K or Form N-SAR, or portion thereof will be filed on or
   before the fifteenth calendar day following the prescribed due date; or the
   subject  quarterly report  or transition  report on  Form 10-Q,  or portion
   thereof  will be filed  on or before  the fifth calendar  day following the
   prescribed due date; and







       (c)  The accountant's statement or other exhibit required by Rule 12b-
     25(c) has been attached if applicable.


   Federal Securities Laws                                      Section 33,321
   Part III - Narrative     Part III - Narrative
   ___________________________________________________________________________

   State below in reasonable detail the reasons why Form 10-K, 20-F, 11-K, 10-
   Q, N-SAR  or the transition  report or portion  thereof could not  be filed
   within the prescribed time period.

   The finance manager  for the registrant is also the production manager.  As
   a result  of  a problem  with  production, an  entire  lot of  product  was
   rejected and had  to be remanufactured to  supply customers.  As  a result,
   the financial  information necessary for  the Form 10Q  was not able  to be
   prepared without unreasonable effort and expense.  

     Part IV - Other Information     Part IV - Other Information
   ___________________________________________________________________________

   (1) Name  and telephone  number: (847) 956-0471 

          Indicate by check  mark whether the registrant (1)  has filednumber of  person to  contact in  regard to  this
   notification Lauane C. Addis,(312) 236-4111_________________________________
                      (Name)                       (Area Code) (Telephone No.)

     (2) Have  all other periodic reports required to  be filed  by  Sectionunder  section 13 or 15(d) of
   the Securities Exchange Act of 1934 or section 30 of the Investment Company
   Act of  1940 during the preceding 12 months (oror for such shorter period that
   the registrant  was required  to file such  reports),  and (2)  hasreport(s) been  subject  to such  filing
          requirementsfiled?   If the
   answer is no, identify report(s).
                               [X] Yes   [ ] No

   (3) Is it  anticipated that any significant change in results of operations
   from the corresponding period for the past 90 days.last fiscal year will be reflected by
   the earnings statements  to be included  in the  subject report or  portion
   thereof?
                               [ ] Yes   X[X] No

   _______    ______

               Number of shares outstanding of common stock asIf  so:  attach an explanation of  the close
          ofanticipated change, both narratively
   and quantitatively, and, if appropriate, state the period covered by this report:  13,806,511

          Page  1 of  the 17  pages contained  in the  sequential numbering
          system.



                             PART 1 - FINANCIAL INFORMATION


          Item 1.  FINANCIAL STATEMENTS




          Board of Directors and Shareholders
          Biosynergy, Inc.
          Elk Grove Village, Illinois

               The accompanying  Balance Sheet  of BIOSYNERGY,  INC. as  at
          October  31, 1996  and  the  related  Statements  of  Operations,
          Shareholders' Equity (Deficit)  and Statements of Cash  Flows for
          the six month  periods ended October  31, 1996 and 1995  were not
          audited;  however, the  financial statements  for  the six  month
          periods ending  October 31, 1996 and 1995 reflect all adjustments
          (consisting only of normal reoccurring adjustments) which are, in
          the opinion of management, necessary to  providereasons why a fair statementreasonable
   estimate of the results cannot be made.
    Biosynergy, Inc.  _________________________________________________________
     (Name of operations for the interim periods presented.

               The financial statements for the fiscal year ended April 30,
          1996, were  not audited  due to the  Company's lack  of available
          cash to pay for such audit; however, the financial statements for
          the  fiscal year  ending April 30,  1996 reflect  all adjustments
          (consisting only of normal reoccurring adjustments) which are,Registrant as specified in opinion of management,  necessary to provide a  fair statement of
          the results of operations for the period presented.








                                  BIOSYNERGY, INC.








          December 6, 1996


                                         2





                                 BIOSYNERGY, INC.
                                  BALANCE SHEET
October 31, 1996 April 30,1996 Unaudited Unaudited ________________ _____________ ASSETS CURRENT ASSETS Cash 14,402 9,733 Accounts Receivable, Trade, Net of Allowance for Uncollectible Accounts of $433 at October 31, 1996 and $500 at April 30, 1996 77,760 56,750 Inventories (Notes 1 and 4) 47,420 47,894 Prepaid Expenses 3,102 2,795 Due From Affiliates - Short Term Note (Note 3) 2,000 - __________ ___________ Total Current Assets 144,684 117,172 __________ ___________ DUE FROM AFFILIATES (Note 3) 281,099 271,020 __________ ___________ PROPERTY AND EQUIPMENT Equipment 154,036 154,036 Leasehold Improvements 12,216 12,216 __________ ___________ 166,252 166,252 Less: Accumulated Depreciation and Amortization ( 162,175) ( 162,063) __________ ___________ 4,077 4,189 OTHER ASSETS Patents, Net of Accumulated Amortization (Note 1) 27,563 29,805 Deposits 6,126 6,145 Investment in Affiliated Company (Note 3) - - __________ ___________ 33,689 35,950 463,549 428,331 __________ ___________
3
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable 28,224 46,422 Accrued Executive Compensation 82,699 99,435 Other Accrued Compensation 2,559 1,102 Accrued Payroll Taxes 749 - Deferred Rent 1,268 317 Other Accrued Expenses 2,411 1,583 _________ ________ Total Current Liabilities 117,910 148,859 COMMITMENTS AND CONTINGENCIES (Note 7) - - _________ ________ SHAREHOLDERS' EQUITY (Note 5) Common Stock, No Par Value; 20,000,000 Shares Authorized, Issued: 13,806,511 Shares at October 31, 1996 and at April 30, 1996 632,663 632,663 ________ ________ Additional paid-in capital 100 100 Accumulated Deficit (287,124) (353,291) _________ _________ 345,639 279,472 463,549 428,331 _________ _________ The accompanying notes are an integral part of the financial statements.
4 BIOSYNERGY, INC. STATEMENT OF OPERATIONS UNAUDITED
THREE MONTHS ENDED SIX MONTHS ENDED OCTOBER 31, OCTOBER 31, ________________________ ____________________ 1996 1995 1996 1995 ___________ ___________ ___________ _________ REVENUES Sales 132,439 120,813 265,036 236,686 Interest Income 34 - 34 54 Computer Rentals and Services 150 150 300 300 Other Income 1,910 1,008 5,896 1,869 ___________ ___________ ___________ _________ 134,533 121,971 271,266 238,909 ___________ ___________ ___________ _________ COST AND EXPENSES Cost of Sales and Other Operating Charges 44,720 42,044 90,022 80,319 Research and Development 8,376 7,878 15,473 15,328 Marketing 12,693 11,052 27,289 22,034 General and Administrative 37,904 39,645 72,012 74,993 Interest Expense 149 722 303 1,403 ___________ __________ ___________ __________ 103,842 101,341 205,099 194,077 ___________ __________ ___________ __________ INCOME (LOSS) BEFORE INCOME TAXES AND EXTRAORDINARY ITEMS 30,691 20,630 66,167 44,832 INCOME TAXES 4,534 3,094 11,426 6,725 ___________ __________ ___________ __________ INCOME (LOSS) BEFORE 26,157 17,536 54,741 38,107 ___________ __________ ___________ __________ EXTRAORDINARY ITEMS Reduction of Income Taxes arising from utilization of prior years' Net Operating Losses (Note 8) 4,534 3,094 11,426 6,725 ___________ ___________ ___________ _________ NET INCOME (LOSS) 30,691 20,630 66,167 44,832 ___________ ___________ ___________ _________ NET INCOME (LOSS) PER COMMON SHARE: (Note 6) Before Extraordinary Items .0019 .0013 .0040 .0028 Extraordinary Items .0003 .0002 .0008 .0005 ___________ ___________ ___________ _________ NET INCOME (LOSS) .0022 .0015 .0048 .0033 ___________ ___________ ___________ _________ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Note 7) 13,806,511 13,806,511 13,806,511 13,806,511 __________ __________ __________ __________ The accompanying notes are an integral part of the financial statements.
5 BIOSYNERGY, INC. STATEMENT OF SHAREHOLDERS' EQUITY SIX MONTHS ENDED OCTOBER 31, 1996 Unaudited
Additional Common Stock Paid-in Shares Amount Capital Deficit Total _____________ _________ __________ _______ _____ Balance, May 1, 1996 13,806,511 632,663 100 (353,291) 279,472 Net Profit (Loss) - - - 66,167 66,167 Sale of Common Stock - - - - - _____________ _________ _________ _________ ______ Balance, October 31, 13,806,511 632,663 100 (287,124) 345,639 1995 The accompanying notes are an integral part of the financial statements.
6 BIOSYNERGY, INC. STATEMENTS OF CASH FLOWS Unaudited
SIX MONTHS ENDED OCTOBER 31, 1996 1995 ___________________________ OPERATING ACTIVITIES: Net Income (Loss) 66,167 44,832 Adjustments to Reconcile Net Cash Used for Operating Activities: Depreciation and Amortization 2,354 4,073 Changes in Operating Assets and Liabilities: (Increase) Decrease in Accounts Receivable (21,010) (7,532) (Increase) Decrease in Inventories 474 (6,197) (Increase) Decrease in Prepaid Expenses (307) 1,417 Increase (Decrease) in Accounts Payable and Accrued Expenses (30,949) (16,296) _________ __________ Net Cash Provided (Used) by Operating Activities 16,729 20,297 _________ __________ INVESTING ACTIVITIES: (Increase) Decrease in Due From Affiliates (Note 3) ( 10,079) (10,735) (Increase) Decrease in Due From Affiliates - Short Term Note (Note 3) (2,000) - (Increase) Decrease in Deposits 19 1,009 _________ __________ Net Cash Provided (Used) by Investing Activities (12,060) ( 9,726) _________ __________ FINANCING ACTIVITIES: Proceeds from Borrowing (Repayments) - (7,250) _________ __________ Net Cash Provided (Used) by Financing Activities - (7,250) _________ __________ Increase (Decrease) in Cash and Cash Equivalents 4,669 3,321 _________ __________ Cash and Cash Equivalents at Beginning of Period 9,733 4,520 _________ __________ Cash and Cash Equivalents at End of Period 14,402 7,841 __________ __________ The accompanying notes are an integral part of the financial statements.
7 BIOSYNERGY, INC. NOTES TO FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies: Inventories-Inventories are valued at the lower of cost or market using the FIFO (first-in, first-out) method. Equipment and Leasehold Improvements-Equipment and Leasehold improvements are stated at cost. Depreciation and amortization are computed primarily on 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 property and equipment are capitalized. Significant leasehold improvements are capitalized and amortized over the term of the lease. Research and Development, and Patents-Research and development expenditures are charged to operations as incurred. The cost of obtaining patents, primarily legal fees, are capitalized and amortized over seventeen years on the straight-line method. 2. Company Organization and Description: 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. 3. Related Party Transactions: The Company and its affiliates are related through common stock ownership as follows as of October 31, 1996: S T O C K O F A F F I L I A T E S _____________________________________
F.K. Suzuki Stevia Biosynergy International Medlab Stock Owner Company Inc. Inc. Inc. ___________ ________ __________ _____________ _______ Stevia Company, Inc. - 13.8% - - Biosynergy, Inc. .4% - - - F.K. Suzuki International, Inc. 55.8% 18.8% - 100.0% Fred K. Suzuki, - - 35.6% - Officer and Director Lauane C. Addis, .1% .1% 32.7% - Officer and Director James F. Schembri, - 12.9% - - Director
Upon the completion of the Company's public offering on July 7, 1983, the Company issued 2,000,000 shares of its no par value common stock in exchange for 1,058,181 shares of common stock of Stevia Company, Inc. The common stock of Stevia Company, Inc. 8 BIOSYNERGY, INC. NOTES TO FINANCIAL STATEMENTS had no book value at the time of the exchange and, as a consequence, the Company recorded the exchange at zero dollar value. The Company owned 130,403 shares of Stevia Company, Inc. Common Stock at October 31, 1996. Although the Common Stock of Stevia Company, Inc. can be traded in the over-the-counter market, there is no established public trading market for such common stock due to limited and sporadic trades. The market price of Stevia Company, Inc. Common Stock is unknown. Common offices are shared with Stevia Company, Inc. Intercompany charges for shared expenses are made by whichever company incurs such charges. Such intercompany charges, together with funds advanced in prior years, have resulted in the following balances due from Stevia Company, Inc.: October 31, 1996 - $268,439 April 30, 1996 - $258,360 At April 30, 1996 and October 31, 1996, the financial condition of Stevia Company, Inc. was such that it is unlikely to be able to repay the Company during the current year without liquidating a portion of its assets. The following balances were due from F.K. Suzuki International, Inc. at the dates indicated based on the allocation of common expenses offset by advances received from time to time: October 31, 1996 - $12,660 April 30, 1996 - $12,660 At April 30, 1996 and October 31, 1996, the financial condition of F.K. Suzuki International, Inc. was such that it is unlikely to be able to repay the Company during the current year without liquidating a portion of its assets. On September 20, 1995, the Company loaned Stevia Company, Inc. $3,000.00. This loan is evidenced by a promissory note payable in two equal installments including interest at the rate of 11.5% per annum. See also Note 5. 4. Inventories: Components of inventories are as follows: 9 BIOSYNERGY, INC. NOTES TO FINANCIAL STATEMENTS
April 30, 1996 October 31, 1996 _______________ ________________ Raw Materials $ 30,015 $ 28,369 Work-in process 16,161 16,967 Finished Goods 1,718 2,084 _______________ ________________ $ 47,894 $ 47,420 _______________ ________________
5. Common Stock: All of the stock options and stock appreciation rights for 131,500 shares of stock granted to four advisors, directors, officers, consultants, and employees of the Company under the Company's employee stock incentive plan expired on October 14, 1996. The Company had reserved 350,000 shares of its common stock for this plan. Effective January 31, 1990, the Company entered into an agreement with its President, Fred K. Suzuki, pursuant to which the Company granted an option to convert all or a portion of his accrued but unpaid compensation into shares of the Company's no par value common stock at a conversion rate of $.05 per share. The option is conditioned upon the Company having sufficient liquid assets to pay all employee taxes due at the time of the conversion. The option may be exercised until Mr. Suzuki is no longer owed accrued but unpaid salary. The accrued but unpaid salary arose as a result of Mr. Suzuki agreeing to defer his salary when the Company was not financially able to pay salaries on a regular basis. The option contains anti-dilutive provisions in the event of corporate capital reorganizations. An aggregate of 966,879 shares of the Company's common stock were subject to Mr. Suzuki's option at October 31, 1996. On August 1, 1993, the Company entered into a Stock Option Agreement with Fred K. Suzuki, President, granting Mr. Suzuki an option to purchase 3,000,000 shares of the Company's common stock at an option price of $0.025 per share. This Stock Option Agreement was granted to Mr. Suzuki in consideration of his loaning money to the company on an unsecured basis from time to time. The option contains anti-dilutive provisions in the event of corporate capital reorganizations. As of October 31, 1996, no portion of this Optioncharter) has been exercised. The Company's common stock is traded in the over-the-counter market. However, there is no established public trading market for such common stock due to limited and sporadic trades. The Company's common stock is not listed on a recognized market or stock exchange. 10 BIOSYNERGY, INC. NOTES TO FINANCIAL STATEMENTS 6. Income (Loss) Per Share: Net income or (loss) per common share is computed using the weighted average number of common shares outstanding during the period, after giving effect to stock splits. Fully diluted earnings per share, assuming exercise of outstanding options, is not presented since exercise of the options would be anti- dilutive. 7. Lease Commitments: In 1996, the Company entered into a new lease agreement for its current facilities which expires January 31, 2001. The base rent under the lease, of which 15% is allocated to Stevia Company, Inc., for each fiscal year is as follows: Year ending April 30, Total Base Rent ____________________ ____________________ 1996 $11,000 1997 $66,733 1998 $68,200 1999 $68,567 2000 $69,300 2001 $51,975 Also included in the lease agreement are escalation clauses for the lessor's increases in property taxes and other operating expenses. The lease can be extended for an additional five year term. 8. Income Taxes: At April 30, 1996, net operating loss carryforwards were available and expire, if not used, as follows: Year Ending Net Operating April 30, Losses _____________ _______________ 1998 $ 281,470 1999 677,671 2000 455,166 2001 449,142 2002 132,470 2003 85,822 2004 41,176 2006 160 2007 28,253 ______________ _____________ $ 2,151,330 11 BIOSYNERGY, INC. NOTES TO FINANCIAL STATEMENTS The Company adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes" for the fiscal year ending April 30, 1994 as required by SFAS No. 109. The effect, if any, of adopting Statement No. 109 on pre-tax income from continuing operations is not material. The company has elected not to retroactively adopt the provisions allowed in SFAS No. 109; however, all provisions of the document have been applied since the beginning of fiscal year 1994. 9. Major Customers: Shipments to one customer accounted for approximately 31.63% of sales during the six month period ending October 31, 1996. The outstanding receivable from this customer was $31,852.15 at October 31, 1996. 10. Management's Plans: In view of the fact the Company has incurred substantial losses in prior years, management of the Company recognizes the Company's ability to continue as a going concern is subject to continued sales performance and the ability of the Company to obtain financing, when needed. To this extent, management intends to continue introducing the Company's products to new markets and expand its marketing efforts in the traditional medical market. 12 Item 2. MANAGEMENT ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SALES/REVENUES ______________ For the three month period ending October 31, 1996 ("2nd Quarter"), the net sales increased 9.62% or $11,626, and increased 11.98% or $28,350 during the six month period ending October 31, 1996, as compared to net sales for the comparative periods ending in 1995. This increase in sales is the result of increased sales of a variety of the Company's products rather than any single product. As of October 31, 1996, the Company had no material product back orders. In addition to the above, the Company realized $300 of income as a result of leasing a portion of its computer time to Stevia Company, Inc. ("Stevia"), an affiliate, and $5,896 of miscellaneous income, including contract printing, and $34 of interest income for the six month period ending October 31, 1996. INCOME/LOSS ___________ The Company realized a net profit of $30,691 during the 2nd Quarter as compared to a net profit of $20,630 for the comparative quarter in the prior year. The Company also realized a net profit of $66,167 for the six month period ending October 31, 1996, as compared to a net profit of $44,832 during the same period in 1995. The increase in income is a result of improved sales withput any material changes in operating expenses. There can be no assurance that the Company's sales will improve or stay at their present level on which the profitability of the Company is dependent. As of April 30, 1996, the Company has incurred net operating losses aggregating $2,151,330. As a result of net operating loss carryovers, no income taxes were due for Fiscal 1996 and will unlikely be due for Fiscal 1997. See "FINANCIAL STATEMENTS" for the effect of the net operating loss carryforwards on the Company's income tax position. The Tax Reform Act of 1986 will not alter the Company's net operating loss carryforward position, and the net operating loss carryforwards will be available and expire, if not used, as set forth in Footnote 8 of the "FINANCIAL STATEMENTS." EXPENSES ________ GENERAL _______ The operating expenses incurred by the Company during the 2nd Quarter increased overall by 2.47% or $2,501, and increased by 5.68% or $11,022 for the six month period ending October 31, 1996. These fluctuations were not material to the operations of the Company or indicative of any unusual trends. An explanation of each catagory of expenses is included to assist the reader in reviewing the operations of the Company during the periods indicated. 13 COST OF SALES AND OTHER OPERATING CHARGES _________________________________________ The cost of sales and other operating charges during the 2nd Quarter increased by $2,676, and increased by $9,703 during the six month period ending October 31, 1996 as compared to the same periods ending in 1995. As a percentage of sales, the cost of sales and other operating charges were 33.77% during the 2nd Quarter and 34.8% for the same quarter ending in 1995, and 33.96% during the six month period ending October 31, 1996 compared to 33.93% in 1995. The overall cost of sales and operating charges as a percentage of sales, have not materially changed during the last year, and are not expected to materially change in the forseeable future. RESEARCH AND DEVELOPMENT ________________________ Research and Development costs increased by $498 or 5.94% during the 2nd Quarter, as compared to the same quarter in 1995. These costs increased by $145 or .94% during the six month period ending October 31, 1996 as compared to the same period in 1995. These cost changes were not material to the operations of the Company and do not reflect changes in the Company's development policies. The Company intends to continue to direct future research and development to the improvement of its current product line and to those new products, the development of which has already commenced, or those products which are natural expansions of the current product line. The Company may also increase its research and development activities to fulfill research and development contracts for the development of products for customers, which will gradually be offset by research revenues. MARKETING _________ Marketing costs for the 2nd Quarter increased by $1,641 or 14.85%, as compared to the Quarter ending October 31, 1995, and increased $5,255 or 23.85% during the six month period ending October 31, 1996 as compared to the same period in 1995. This increase is a result of increased marketing activity such as advertising, trade shows, direct mailings, and an increase in commissioned sales. As financial resources become available, the Company intends to further expand its marketing budget. GENERAL AND ADMINISTRATIVE __________________________ General and administrative costs decreased by $1,741, or 4.39% during the 2nd quarter and decreased by $2,981 or 3.97% during the six month period ending October 31, 1996, as compared to the same period ending in 1995. These decreases are not indicative of any trend, but only representative of normal fluctuations in general and administrative expenses. 14 ASSETS/LIABILITIES __________________ GENERAL _______ Since April 30, 1996, the Company's assets and liabilities have not materially changed. The Company has experienced an increase in current assets and a decrease in liabilities due to improved cash flow. DUE FROM AFFILIATES ___________________ The Company was owed $268,439 by Stevia and $12,660 by F.K. Suzuki International, Inc. ("FKSI"), an affiliate, at October 31, 1996. These affiliates owed $258,360 and $12,660 at April 30, 1996, respectively. These accounts primarily represent common expenses which are charged by one company to the other for reimbursement. These expenses include rent, salaries for common employees, insurance and employee benefits, and legal fees. These expenses are reviewed from time to time to determine if reallocation is appropriate. See "FINANCIAL STATEMENTS." These expenses are incurred in the ordinary course of business. As a result of the increase in amounts due from affiliates, the Company has reduced its own liquid resources. The Company intends to reverse this trend by restricting the advances and common expense charges to Stevia and FSKI until these affiliates are in a position to reimburse the Company. CURRENT ASSETS/CURRENT LIABILITY RATIO ______________________________________ The ratio of current assets to current liabilities, 1.23 to 1, has improved compared to .79 to 1 at April 30, 1996. In view of the Company's operating expenses, there is a risk that the Company's current asset/current liability ratio may not be adequate for the Company's current or future operating needs unless the Company's sales remain at the present level or improve. WORKING CAPITAL/LIQUIDITY _________________________ During the six month period ending October 31, 1996, the Company experienced an increase in working capital of $53,759. This is due to the increase in profit of the Company during the six month period ending October 31, 1996 and the use of the cash flow from operations to reduce liabilities. In view of the fact that the Company has incurred substantial losses in prior years, Management of the Company recognizes the Company's ability to continue as a going concern is subject to maintaining and improving sales, profitable operations, collection of accounts receivable, and the ability of the Company to obtain capital, when needed, of which there is no assurance. The Company intends to continue expanding its marketing efforts in the medical market and new markets. Management also intends to continue seeking out financing opportunities, including selling its common stock to private investors, if necessary. The Company does not have a working line of credit, and there can be no assurance, nor is it anticipated, that the Company will be 15 able to obtain a working line of credit on acceptable terms. Irrespective of the Company's financial condition, the Company has not been refused goods or services from any of its vendors. Except for its operating working capital needs, the Company has no material contingencies for which it must provide. PART II - OTHER INFORMATION ___________________________ Item 6. Exhibits and Reports on Form 8K. (a) The following exhibits are filed as a part of this report: (3) Articles of Incorporation and By-laws (i) (10) Material Contracts (a) Deferred Compensation Option Agreement, dated January 31, 1990, between the Company and Fred K. Suzuki (ii) (b) Stock Option Agreement, dated August 1, 1993, between the Company and Fred K. Suzuki (iii) (c) Installment Promissory Note dated September 20, 1996, in the principal amount of $3,000 payable to the Company by Stevia Company, Inc. (15) Letter dated December 6, 1996, regarding interim financial information. (iv) (27) Financial Data Schedule, attached hereto as an Exhibit. (b) No Current Reports on Form 8K were filed during the period covered by this Report. [FN] _______________________ (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 By-Laws, to the Company's Annual Report on Form 10K for fiscal year ending April 30, 1986 filed with the Securities and Exchange Commission. (ii) Incorporated by reference to the Company's Annual Report on Form 10K for fiscal year ending April 30, 1990 filed with the Securities and Exchange Commission. (iii) Incorporated by reference to the Company's Annual Report on Form 10K for fiscal year ending April 30, 1994 filed with the Securities and Exchange Commission. (iv) This exhibit is included in this report as a part of the Financial Statements, and is incorporated by reference herein. 16 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this reportnotification to be signed on its behalf by the undersigned thereunto duly authorized. Biosynergy, Inc. Date December 10, 1996 _________________ ___________________________________ Fred K. Suzuki, President, Chairman of the Board, Chief Accounting Officer Treasurer Date December 10, 1996 _________________ _____________________________________September 11, 1997 By: __________________________________ Lauane C. Addis, Secretary Corporate Counsel and Director 17 SIGNATURES Pursuant to the requirementsINSTRUCTION: The form may be signed by an executive officer of the Securities Exchange Actregistrant or by any other duly authorized representative. The name and title of 1934,the person signing the form shall be typed or printed beneath the signature. If the statement is signed on behalf of the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Biosynergy, Inc. Date December 10, 1996 /s/ FRED K. SUZUKI /s/ _________________ _____________________________ Fred K. Suzuki President, Chairmanan authorized representative (other than an executive officer), evidence of the Board, Chief Accounting Officer and Treasurer Date December 10, 1996 /s/ LAUANE C. ADDIS /s/ _________________ ____________________________ Lauane C. Addis, Secretary, Corporate Counsel and Director 17representative's authority to sign on behalf of the registrant shall be filed with the form. ___________________________________________________________________________ ATTENTION Intentional misstatements or omissions of fact constitute Federal Criminal Violations (See 18 U.S.C. 1001). _________________________________________________________________ _________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10Q Annual Report Pursuant to Section 13 or 15(d) of THE SECURITIES AND EXCHANGE ACT OF 1934 For the period ending October 31, 1996 Commission File Number: 0-12459 BIOSYNERGY, INC. _________________________________________________________________ (Exact name of registrant as specified in charter) 1940 East Devon Avenue Elk Grove Village, IL 60007 (708) 593-0226 (Address and telephone number of registrant's principal executive office on a principal place of business) _________________________________ EXHIBITS _________________________________________________________________ _________________________________________________________________ EXHIBIT INDEX _____________ Page Number Pursuant to Sequential Exhibit Numbering Number Exhibit System __________ __________ _______________ 10(c) Promissory Note dated September 20, 1996 E-1 27 Financial Data Schedule E-3