UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ______________
Commission File Number 0-12459
Biosynergy, Inc.
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 36-2880990
- -------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1940 East Devon Avenue, Elk Grove Village, Illinois 60007
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 956-0471
---------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
---------- -----------
Number of shares outstanding of common stock as of the close of the
period covered by this report: 13,806,511
------------
Page 1 of the 20 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 January 31,
2000
and the related Statements of Operations, Shareholders' Equity (Deficit) and
Statements of Cash Flows for the three and nine month periods ended January
31, 2000 and 1999 were not audited; however, the financial statements for the
three and nine month periods ending January 31, 2000 and 1999 reflect all
adjustments (consisting only of normal reoccurring adjustments) which are, in
the opinion of management, necessary to provide a fair statement of the
results of operations for the interim periods presented.
The financial statements for the fiscal year ended April 30, 1999, 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, 1999
reflect all adjustments (consisting only of normal reoccurring adjustments)
which are, in opinion of management, necessary to provide a fair statement of
the results of operations for the period presented.
BIOSYNERGY, INC.
March 9, 2000
BIOSYNERGY, INC.
BALANCE SHEET
ASSETS
January 31, 2000 April 30,1999
Unaudited Unaudited
CURRENT ASSETS
Cash 63,840 319,508
Short term Investments (Note 4) 250,000 -
Accounts Receivable, Trade, Net of
Allowance for Uncollectible Accounts
of $500 at January 31, 2000 and $500 at
April 30, 1999 78,199 76,649
Inventories (Notes 1 and 5) 56,557 49,671
Note Receivable from Officer (Note 3) - 8,000
Prepaid Expenses 12,848 10,314
Interest Receivable (Notes 3 and 4) 9,190 66
--------- -------
Total Current Assets 470,634 464,208
--------- -------
DUE FROM AFFILIATE (Note 3) 18,866 18,574
--------- -------
PROPERTY AND EQUIPMENT
Equipment 129,045 102,497
Leasehold Improvements 15,140 15,140
--------- -------
144,185 117,637
Less: Accumulated Depreciation and
Amortization ( 103,960) ( 99,018)
--------- ---------
40,225 18,619
--------- ---------
OTHER ASSETS
Deposits 5,995 5,995
--------- ---------
5,995 5,995
--------- ---------
535,720 507,396
--------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable 10,525 11,899
Other Accrued Compensation 11,489 4,230
Accrued Payroll Taxes 885 324
Deferred Rent 903 1,581
Other Accrued Expenses 1,707 2,128
------- -------
Total Current Liabilities 25,509 20,162
------- -------
COMMITMENTS AND CONTINGENCIES (Note 8) - -
------- -------
SHAREHOLDERS' EQUITY (Note 6)
Common Stock, No Par Value; 20,000,000 Shares
Authorized, Issued: 13,806,511
Shares
at January 31, 2000 and at April 30, 1999 632,663 632,663
Additional paid-in capital 100 100
Accumulated Deficit (122,552) (145,529)
--------- ---------
510,211 487,234
--------- ---------
535,720 507,396
----------- ---------
The accompanying notes are an integral part of the financial statements.
BIOSYNERGY, INC.
STATEMENT OF OPERATIONS
Unaudited
Three Months Ended Nine Months Ended
January 31, January 31,
2000 1999 2000 1999
--------- --------- -------- --------
REVENUES
Sales 132,954 131,704 420,645 409,332
Computer Rentals and Services - 150 - 450
Other Income 435 879 2,037 2,365
Interest Income 3,290 - 9,527 -
------- ------- ------- -------
136,679 132,733 432,209 412,147
------- ------- ------- -------
COST AND EXPENSES
Cost of Sales and Other
Operating Charges 56,780 50,863 148,622 144,800
Research and Development 34,923 11,636 72,988 33,681
Marketing 15,779 18,642 44,638 54,439
General and Administrative 52,828 46,787 142,984 136,769
Interest Expense - - - 181
------- ------- ------- -------
160,310 127,928 409,232 363,270
------- ------- ------- -------
NET INCOME (LOSS) BEFORE INCOME
TAXES AND EXTRAORDINARY
ITEMS (23,631) 4,805 22,977 48,877
INCOME TAXES - 721 5,101 7,332
-------- ------- ------- -------
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEMS (23,631) 4,084 17,876 41,545
-------- ------- ------- -------
EXTRAORDINARY ITEMS
Reduction of Income Taxes
arising from utilization of prior
Years' Net Operating Losses
(Note 9) - 721 5,101 7,332
---------- -------- -------- --------
NET INCOME (LOSS) (23,631) 4,805 22,977 48,877
---------- -------- -------- --------
NET INCOME (LOSS) PER
COMMON SHARE OUTSTANDING (Note 7):
Before Extraordinary Items (.0017) .0003 .0013 .0030
Extraordinary Items - .0000 .0004 .0005
--------- ------- ------ ------
NET INCOME (LOSS) (.0017) .0003 .0017 .0035
-------- ------- ------ ------
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
(Note 7) 13,806,511 13,806,511 13,806,511 13,806,511
---------- ---------- ---------- ----------
NET INCOME (LOSS) PER COMMON SHARE
AND COMMON SHARE EQUIVALENTS (Note 7) (.0014) .0003 .0014 .0029
------------ ---------- --------- --------
The accompanying notes are an integral part of the financial statements.
BIOSYNERGY, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
NINE MONTHS ENDED JANUARY 31, 2000
Unaudited
Additional
Common Stock Paid-in
Shares Amount Capital Deficit Total
Balance, May 1,
1999 13,806,511 632,663 100 (145,529) 487,234
Net Profit (Loss) - - - 22,977 22,977
Balance, January 31,
2000 13,806,511 632,663 100 (122,552) 510,211
---------- -------- ---- --------- -------
The accompanying notes are an integral part of the financial statements.
BIOSYNERGY, INC.
STATEMENTS OF CASH FLOWS
Unaudited
NINE MONTHS ENDED JANUARY 31,
2000 1999
----------- -----------
OPERATING ACTIVITIES:
Net Income (Loss) 22,977 48,877
Adjustments to Reconcile Net Cash Used for
Operating Activities:
Depreciation and Amortization 4,942 5,732
Changes in Operating Assets and Liabilities:
(Increase) Decrease in Accounts Receivable ( 1,550) 1,314
(Increase) Decrease in Inventories ( 6,886) 3,488
(Increase) Decrease in Prepaid Expenses ( 2,534) 1,547
Increase (Decrease) in Accounts Payable
and Accrued Expenses 5,347 (6,548)
---------- ---------
Net Cash Provided (Used) by Operating
Activities 22,296 54,410
---------- ---------
INVESTING ACTIVITIES:
(Increase) Decrease in Due From Affiliate
(Note 3) (292) ( 19,784)
(Increase) Decrease in Short Term Note Due
From Affiliate (Note 3) - 2,200
(Increase) Decrease in Short-Term Investment
(Note 4) (250,000) -
(Purchase) Retirement of Equipment ( 26,548) 2,061
(Increase) Decrease in Interest Receivable
from Officer (Note 3) 66 -
(Increase) Decrease in Short-Term Investment
Interest Receivable(Note 4) ( 9,190) -
(Increase) Decrease in Short-Term Note from
Officer (Note 3) 8,000 -
Net Cash Provided (Used) by Investing
Activities (277,964) (19,923)
----------- ----------
FINANCING ACTIVITIES:
Net Cash Provided (Used) by Financing
Activities - -
------------ -----------
Increase (Decrease) in Cash and Cash
Equivalents (255,668) 34,487
Cash and Cash Equivalents at Beginning ------------ -----------
of Period 319,508 31,150
------------ -----------
Cash and Cash Equivalents at End of Period 63,840 65,637
------------ -----------
The accompanying notes are an integral part of the financial statements.
BIOSYNERGY, INC.
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
Inventories - Inventories are valued at the lower of cost using the FIFO
(first-in, first-out) method or market (using net realizable value).
Equipment and Leasehold Improvements - Equipment and leasehold improvements
are stated at cost. Depreciation is computed primarily on the straight-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.
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 the life of the
respective patent on the straight-line method.
2. Company Organization and Description:
Biosynergy, Inc. (Company) was incorporated under the laws of the State of
Illinois on February 9, 1976. It is primarily engaged in the development and
marketing of medical, consumer and industrial thermometric and 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 January 31, 2000:
S T O C K O F A F F I L I A T E S
F.K. Suzuki
Biosynergy International Medlab
Stock Owner Inc. Inc. Inc.
---------- ------------- -------
F.K. Suzuki International, Inc. 32.6% - 100%
Fred K. Suzuki, Officer - 35.6% -
Lauane C. Addis, Officer .1% 32.7% -
James F. Schembri, Director 12.9% - -
Mary K. Friske, Officer .1% .2% -
Laurence C. Mead, Officer .1% 4.0% -
BIOSYNERGY, INC.
NOTES TO FINANCIAL STATEMENTS
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,
representing 19% of the outstanding common stock of the Company, in exchange for
1,058,181 shares of the common stock of Stevia Company, Inc. ("Stevia"), which
was approximately 4.4% of the then outstanding common stock of Stevia. The
common stock of Stevia had no book value at the time of the exchange and, as a
consequence, the Company recorded the exchange at zero dollar value. On April
16, 1999, Stevia was judicially dissolved and the remaining shares of Common
Stock of the Company held by Stevia (1,900,000 shares) were assigned to F.K.
Suzuki International, Inc. ("FKSI") for certain amounts payable by Stevia to
FKSI. The shares of Stevia Common Stock held by the Company are now
worthless.
The Company extended a line of credit to Stevia on August 31, 1998 to finance
Stevia's dissolution under the terms of a short-term note. The balance of
this note was paid in March, 1999.
Prior to the dissolution of Stevia, common offices, employees and certain
operating expenses were shared with Stevia. On April 16, 1999, inter-company
charges to Stevia for shares expenses aggregated $315,015. The Company
received 93% of this amount, or $290,918, as its share of the Stevia
dissolution proceeds, resulting in a loss of $24,097. Since April 16, 1999,
the ongoing common expenses previously shared with Stevia have been allocated
100% to the Company as reflected on the Company's financial statements.
The following balances were due from F.K. Suzuki International, Inc. at
January 31, 2000:
April 30, 1999 - $18,574
January 31, 2000 - $18,866
The balances result from an allocation of common expenses offset by advances
received from time to time. At January 31, 2000, the financial condition of
F.K. Suzuki International, Inc. is such that it is unlikely to be able to
repay Biosynergy during the next year without liquidating a portion of its
assets.
On April 1, 1999, the Company loaned $8,000 to its President, Fred K. Suzuki,
as an accommodation to Mr. Suzuki. The loan is evidenced by an unsecured
Promissory Note payable on demand with 10% interest on the unpaid balance.
The principal balance of this Note was paid on October 5, 1999, and the
interest was paid on November 23, 1999.
BIOSYNERGY, INC.
NOTES TO FINANCIAL STATEMENTS
4. Short-Term Investments:
The Company invested $250,000 of the proceeds received from the liquidation
of Stevia described in Footnote 3 above in a 270-day Certificate of Deposit,
pending their use. The Company is not registered under the Investment
Company Act of 1940 and therefore is limited to the types of investments
available. The funds invested in the Certificate of Deposit, the interest
earned and the remaining proceeds received upon the liquidation of Stevia have
not been allocated or earmarked for any specific use.
5. Inventories:
Components of inventories are as follows:
April 30, 1999 January 31, 2000
-------------- ----------------
Raw Materials $32,639 $35,810
Work-in process 6,634 10,530
Finished Goods 10,378 10,217
--------- ---------
$49,671 $56,557
6. Common Stock:
The Company's stock is traded in the Over-The-Counter market. However, there
is no established public trading market due to limited and sporadic trades.
The Company's common stock is not listed on a recognized market or stock
exchange.
On November 12, 1998, the Company granted an option to its President, Fred K.
Suzuki, to purchase all or a portion of 3,000,000 shares of the Company's
common stock at a purchase price of $.025 per share. The option is subject
to several contingencies including, but not limited to, shareholder approval.
As of January 31, 2000, no portion of this option has been exercised. This
option will expire on November 12, 2001.
7. Income or (Loss) Per Shares:
Net income or (loss) per common share is computed using the weighted average
number of common shares outstanding during the period, and also computed
using the average number of common shares outstanding during the period after
giving effect to stock splits and the number of shares of common stock
equivalents which would have been outstanding after exercises of stock option
granted to officers. The calculation of net income (loss) per common share and
common share equivalents is as follows:
BIOSYNERGY, INC.
NOTES TO FINANCIAL STATEMENTS
Three Months Ended Nine Months Ended
January 31 January 31
2000 1999 2000 1999
-------- ------- ------- -------
Net Income (Loss) (23,631) 4,805 22,977 48,877
Weighted Average Shares Outstanding
Shares of Common Stock Outstanding 13,806,511 13,806,511 13,806,511 13,806,511
Common Share Equivalents -
Options to Officer 3,000,000 3,000,000 3,000,000 3,000,000
Total Weighted Shares 16,806,511 16,806,511 16,806,511 16,806,511
========== ========== =========== =========
Net Income (Loss) per Common Share
and Common Share Equivalent (.0014) .0003 .0014 .0029
8. Lease Commitments:
In 1996 the Company entered a lease agreement for its current facilities
which expires January 31, 2001. The base rent under the lease escalates over
the life of the lease. Total rent payments for each fiscal year are as follows:
Year ending April 30 Total Base Rent
-------------------- ---------------
1996 11,000
1997 66,733
1998 68,200
1999 68,567
2000 69,300
2001 51,975
Also included in the lease agreement are escalation clauses for the lessor's
increases in property taxes and other operating expenses. The lease can be
extended for an additional five year term.
9. Income Taxes:
At April 30, 1999, net operating loss carryforwards were available and
expire, if not used, as follows:
Year Ending Net Operating
April 30, Losses
----------- -------------
2000 455,166
2001 449,142
2002 132,470
2003 85,822
2004 41,176
2006 160
2007 28,253
----------
$1,192,189
==========
BIOSYNERGY, INC.
NOTES TO FINANCIAL STATEMENTS
The Company has adopted Statement of Financial Accounting Standards (SFAS)
No. 109, "Accounting for Income Taxes" as required by SFAS No. 109. The effect,
if any, of adopting Statement No. 109 on pretax income from continuing
operations is not material. The Company has elected not to retroactively
adopt the provisions allowed in SFAS No. 109, however all provisions of the
document have been applied since the beginning of fiscal year 1994.
10. Major Customers:
Shipments to one customer amounted to approximately 40.4% of sales during the
quarter ending January 31, 2000. At January 31, 2000 there was an
outstanding account receivable from this customer of approximately $43,039.
11. Management's Plans:
Management of the Company recognizes the Company's ability to continue as a
going concern is subject to continuing sales performance and the ability of
the Company to raise money, when needed. To this extent, management has
endeavored to introduce the Company's products in new markets, expand its
marketing efforts in the traditional medical market and introduce new
products. Finally, management intends to continue pursuing financing
opportunities, if necessary.
12. Forward-Looking Statements:
This report may contain statements which, to the extent they are not
recitations of historical fact, constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995 (the
"Reform Act"). Such forward-looking statements involve risks and
uncertainties. Actual results may differ materially from such
forward-looking statements for reasons including, but not limited to, changes to
and developments in the legislative and regulatory environments effecting the
Company's business, the impact of competitive products and services, changes
in the medical and laboratory industries caused by various factors, as well
as other factors as set forth in this report. Thus, such forward-looking
statements should not be relied upon to indicate the actual results which
might be obtained by the Company. No representation or warranty of any kind
is given with respect to the accuracy of such forward-looking information.
The forward-looking information has been prepared by the management of the
Company and has not been reviewed or compiled by independent public
accountants.
BIOSYNERGY, INC.
Item 2.MANAGEMENT ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
--------------------------------------------------------------------
SALES/REVENUES
- --------------
For the three month period ending January 31, 2000 ("3rd Quarter"), the net
sales increased 1% or $1,250, and increased 2.76% or $11,313 during the nine
month period ending January 31, 2000, as compared to net sales for the
comparative periods ending in 1999. This overall increase in sales is
generally the result of increased sales of HemoTempR II Blood Temperature
Monitors. As of January 31, 2000, the Company had $7,808 of product back
orders.
In addition to the above, the Company realized $9,527 of interest income as a
result of short term investments; and $2,037 of miscellaneous income for the
nine month period ending January 31, 2000.
INCOME/LOSS
- -----------
The Company realized a net loss of $23,631 during the 3rd Quarter as compared
to a net profit of $4,805 for the comparative quarter of the prior year. The
Company also realized a net profit of $22,977 for the nine month period ending
January 31, 2000 as compared to a net profit of $48,877 during the same
period in 1999. The decrease in net profit is due primarily to an increase in
research and development expenses described below.
As of April 30, 1999, the Company has incurred net operating
losses/carryovers aggregating $1,192,189. As a result of net operating loss
carryovers, no income taxes were due for Fiscal 1999 and will unlikely be due
for Fiscal 2000. 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 9 of the "FINANCIAL STATEMENTS."
EXPENSES
- --------
GENERAL
-------
The operating expenses incurred by the Company during the 3rd Quarter
increased overall by 25.31%, or $32,382, and increased by 12.65%, or $45,962
for the nine month period ending January 31, 2000. An explanation of each
category of expenses is included to assist the reader in reviewing the
operations of the Company during the periods indicated.
COST OF SALES AND OTHER OPERATING CHARGES
-----------------------------------------
The cost of sales and other operating charges during the 3rd Quarter
increased by $5,917 and increased by $3,822 during the nine month period ending
January 31, 2000 as compared to the same periods in 1999. As a percentage of
sales, the cost of sales and other operating charges were 42.71% during the 3rd
Quarter compared to 38.62% for the same quarter ending in 1999, and 35.33%
during the nine month period ending January 31, 2000 as compared to 35.37%
for the same nine-month period ending in 1999. Although the cost of sales and
operating charges increased, the cost of sales and operating charges, as a
percentage of sales, has not materially changed during the current year, and
is not expected to materially change in the foreseeable future.
RESEARCH AND DEVELOPMENT
------------------------
Research and development costs increased $23,287 or 200.1% during the 3rd
Quarter, as compared to the same quarter in 1999. These costs increased by
$39,307 or 116.7% during the nine month period ending January 31, 2000 as
compared to the same period in 1999. This increase is due to the Company's
investigation of certain compounds for use in foods and other products. These
compounds are subject to Food and Drug Administration regulation, but have
been designated as generally recognized as safe. These expenses include
travel, laboratory supplies, and legal and technical consulting expenses
related to these compounds. Historically, the Company's research and
development activities have been limited to improvement of the current
product line in development of products which are natural extensions thereof.
Recently the Company has been investigating other products and accessories
complementary to its current product line and unrelated uses.
MARKETING
---------
Marketing costs for the 3rd Quarter decreased by $2,863 or 15.36%, as
compared to the quarter ending January 31, 1999, and decreased $9,801 or 18%
during the nine month period ending January 31, 2000 as compared to the same
period in 1999. This decrease is reflective of non-reoccurring expenses
incurred during the nine month period ending January 31, 1999 rather than a
decrease inreoccurring marketing expenses. These non-reoccurring expenses
included attendance at trade shows during the comparative period ending January
31, 1999.
GENERAL AND ADMINISTRATIVE
--------------------------
General and administrative costs increased by $6,041, or 12.91%, during the
3rd Quarter and increased by $6,215 or 4.54% during the nine month period
ending January 31, 2000, as compared to the same periods in 1999. The
overall increase in these costs were primarily related to ordinary increases in
salaries and bonuses, and increased costs, including rent and salaries,
previously allocated to Stevia Company, Inc. ("Stevia"). See "Related Party
Transactions below".
ASSETS/LIABILITIES
- ------------------
GENERAL
-------
Since April 30, 1999, the Company's assets and liabilities have not
materially changed. The Company invested $250,000 of the proceeds received from
Stevia as a result of its liquidation on April 16, 1999 in a 270-day certificate
of deposit. Since the Company is not registered under the Investment Company
Act of 1940, it is limited to the types of investments which may be made with
such proceeds. Management anticipates interest earned on the Certificate of
Deposit will be used to augment operating expenses. The funds invested in
the certificate of deposit and the interest have not been allocated or earmarked
for any specific use.
The increase in current assets from operations, primarily cash and accounts
receivable, is due to normal fluctuations and is not indicative of any trend
in the operations in the Company.
RELATED PARTY TRANSACTIONS
--------------------------
On April 16, 1999, Stevia was judicially dissolved. Prior to the dissolution
of Stevia, common offices, employees and certain operating expenses were
shared by the Company and Stevia. On April 16, 1999, inter-company charges
to Stevia for shared expenses aggregated $315,015. The Stevia dissolution plan
called for each creditor to receive 93% of the amount owed in full
satisfaction of such amount. As a result, the Company received $290,918 as
its share of the Stevia dissolution proceeds. This resulted in a loss of
$24,097.
The Company was owed $18,866 by F.K. Suzuki International, Inc. ("FKSI"), an
affiliate, at January 31, 2000. FKSI owed $18,574 at April 30, 1999. This
account primarily represents common expenses which are charged by the Company
to FKSI for reimbursement. These expenses include certain office expenses,
general operating expenses and legal fees. See "Financial Statements."
These expenses are incurred in the ordinary course of business. Although
management believes it is cost effective to share common expenses with FKSI, the
Company has reduced the amount of advances and common expenses charged to FKSI
until FKSI is in a position to reimburse the Company. Collectability of the
amounts due from FKSI cannot be assured without the liquidation of all or a
portion of its assets, and thus such receivable has been classified as a non-
current asset.
On November 12, 1998, 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 $.025 per
share. The option is subject to several contingencies, including, but not
limited to, shareholder approval. Management believes the option had no value
in excess of the fair market value of the Company's common stock at the time it
was granted, however, there was no independent analysis of this transaction. The
option contains anti-dilutive provisions in the event of corporate capital
reorganizations. As of January 31, 2000, no portion of this option had been
exercised. This option will expire on November 12, 2001.
On April 1, 1999, the Company loaned $8,000 to its President, Fred K.
Suzuki.
The loan was evidenced by an unsecured note payable on demand with 10%
interest on the unpaid balance. The principal balance of the note was paid
on October 5, 1999, and the interest was paid on November 23, 1999. The Company
made this loan as an accommodation to Mr. Suzuki. There has not been an
independent evaluation of the value of this loan to Mr. Suzuki, however, it
is believed by management that the interest charged Mr. Suzuki on this loan
approximates fair market interest.
CURRENT ASSETS/CURRENT LIABILITY RATIO
- --------------------------------------
The ratio of current assets to current liabilities, 18.45 to 1, has
decreased compared to 23.02 to 1 at April 30, 1999. Management believes it has
sufficient current assets for its operation during the current year provided
there is no adverse material changes in operations.
WORKING CAPITAL/LIQUIDITY
- -------------------------
During the nine-month period ending January 31, 2000, the Company experienced
an increase in working capital of $1,079. This is due to the profitable
operations of the Company during the nine-month period January 31, 2000.
The Company has attempted to conserve working capital whenever possible. To
this end, the Company attempts to keep inventory at minimum levels. The
Company believes that it will be able to maintain adequate inventory to
supply its customers on a timely basis by careful planning and forecasting
demand for its products. However, the Company is nevertheless required, as is
customary in the medical and laboratory markets, to carry inventory to meet the
delivery requirements of customers and thus, inventory represents a substantial
portion of the Company's current assets.
The Company presently grants payment terms to customers and dealers of 30
days. The Company will not accept returns of products from its dealers
except for exchange, but does guarantee the quality of its products to the end
user.
As of January 31, 2000, the Company had $470,634 of current assets
available. Of this amount, $56,557 was inventory and $78,199 was net trade
receivables. Management of the Company believes that it has sufficient working
capital to continue operations for the fiscal year ending April 30, 2000
provided the Company's sales and ability to collect accounts receivable are not
adversely affected. In the event the Company's sales decrease or the
receivables of the Company are impaired for any reason, it may be necessary to
obtain additional financing to cover working capital items and keep current
trade accounts payable, of which there can be no assurance.
Except for its operating capital needs, the Company has no material
contingencies for which it must provide.
BIOSYNERGY, INC.
PART II - OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8K.
-------------------------------
(a) The following exhibits are filed as a part of this report:
(2) Plan of Acquisition, reorganization, arrangement, liquidation
or succession - none.
(3) Articles of Incorporation and By-laws(i)
(4) Instruments defining rights of security holders, including
indentures - none.
(10) Material Contracts
(a) Note, dated August 31, 1998, executed by Stevia Company,
Inc. (ii)
(b) Mortgage, dated August 31, 1998, executed by Stevia
Company Inc. (ii)
(c) Stock Option Agreement, dated November 12, 1998, between
the Company and Fred K. Suzuki (ii).
(11) Statement regarding computation of per share earnings (iii).
(15) Letter dated March 9, 2000, regarding interim financial
information (iii).
(18) Letter regarding change in accounting principals - none.
(19) Reports furnished to security holders - none.
(22) Published report regarding matters submitted to vote of
security holders - none.
(24) Power of Attorney - none.
(27) Financial Data Schedule - P.E-1.
(b) No Current Reports on Form 8-K were filed during the period covered
by this Report.
____________________________
(i) Incorporated by reference to a Registration Statement filed on Form
S-18 with the Securities and Exchange Commission, 1933 Act Registration Number
3-28015C, 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. Incorporated by reference to the Company's Quarterly Report
on Form 10K for the fiscal year ending April 30, 1990 filed with the Securities
and Exchange Commission.
(ii) Incorporated by reference to the Company's Quarterly Report on Form
10Q for quarterly period ended January 31, 1999.
(iii) This exhibit is included in this report as a part of the Financial
Statements, and is incorporated by reference herein.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Biosynergy, Inc.
Date March 10, 2000 /s/ Fred K. Suzuki/s/
----------------------------------
Fred K. Suzuki
President, Chairman of the Board,
Chief Accounting Officer
and Treasurer
Date March 10, 2000 /s/Lauane C. Addis/s/
----------------------------------
Lauane C. Addis
Secretary, Corporate Counsel and
Director
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10Q
Quarterly Report Pursuant to Section 13 or 15 (d)
of
THE SECURITIES AND EXCHANGE ACT OF 1934
For the period ending January 31, 2000
Commission File Number: 0-12459
BIOSYNERGY, INC.
-------------------------------------------------
(Exact name of registrant as specified in charter)
1940 East Devon Avenue
Elk Grove Village, IL 60007
(847) 956-0471
Address and telephone number of registrant's principal executive office or
principal place of business)
---------------------------------------
EXHIBITS
- -------------------------------------------------------------------------------
BIOSYNERGY, INC.
EXHIBIT INDEX
-------------
Page Number
Pursuant to
Sequential
Exhibit Numbering
Number Exhibit System
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27 Financial Data Schedule E-1