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