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, 1996
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.
<PAGE>
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, 1996 and the related Statements of Operations,
Shareholders' Equity (Deficit) and Statements of Cash Flows for
the nine month periods ended January 31, 1996 and 1995 were not
audited; however, the financial statements for the nine month
periods ending January 31, 1996 and 1995 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,
1995, 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, 1995 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 14, 1996
<PAGE>
<TABLE>
BIOSYNERGY, INC.
BALANCE SHEET
ASSETS
<CAPTION)
January 31, 1996 April 30,1995
Unaudited Unaudited
________________ _____________
<S> <C> <C>
CURRENT ASSETS
Cash 9,993 4,520
Accounts Receivable, Trade, Net of
Allowance for Uncollectible Accounts
of $500 at January 31, 1996 and
April 30, 1995 63,621 58,152
Inventories (Notes 1 and 4) 48,117 44,947
Prepaid Expenses 4,358 4,133
__________ ___________
Total Current Assets 126,089 111,752
__________ ___________
DUE FROM AFFILIATES (Note 3) 266,357 250,006
__________ ___________
PROPERTY AND EQUIPMENT
Equipment 154,036 154,036
Leasehold Improvements 12,216 12,216
__________ ___________
166,252 166,252
Less: Accumulated Depreciation and
Amortization ( 161,999) ( 159,919)
__________ ___________
4,253 6,333
OTHER ASSETS
Patents, Net of Accumulated
Amortization (Note 1) 30,978 34,725
Deposits 5,262 6,504
Investment in Affiliated Company (Note 3) - -
__________ ___________
36,240 41,229
432,939 409,320
__________ ___________
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Accounts Payable 69,286 66,863
Notes Payable - Officer 4,500 16,288
Accrued Executive Compensation 100,012 97,768
Other Accrued Compensation 4,407 5,567
Accrued Payroll Taxes (Includes Penalties of
$0 at January 31, 1996 and $8,444 at
April 30, 1995) - 26,758
Deferred Rent - 2,774
Other Accrued Expenses 4,418 6,027
Total Current Liabilities 182,623 222,045
_________ ________
COMMITMENTS AND CONTINGENCIES (Note 8) - -
_________ ________
<PAGE>
SHAREHOLDERS' EQUITY (Notes 5 and 6)
Common Stock, No Par Value; 20,000,000 Shares
Authorized, Issued: 13,806,511 Shares
at January 31, 1996 and at April 30, 1995 632,663 632,663
________ ________
Additional paid-in capital 100 100
Accumulated Deficit since July 31, 1985 in
connection with Quasi-Reorganization (382,447) (445,488)
--------- ---------
250,316 187,275
432,939 409,320
_________ _________
--------- ---------
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
BIOSYNERGY, INC.
STATEMENT OF OPERATIONS
UNAUDITED
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JANUARY 31, JANUARY 31,
________________________ _____________________
1996 1995 1996 1995
___________ ____________ ___________ _________
<S> <C> <C> <C> <C>
REVENUES
Sales 113,905 116,261 350,591 326,835
Interest Income - - 54 41
Computer Rentals and
Services 150 150 450 450
Other Income 751 1,784 2,621 3737
___________ ___________ ___________ _________
114,806 118,195 353,716 331,063
___________ ___________ ___________ _________
COST AND EXPENSES
Cost of Sales and Other
Operating Charges 43,159 45,161 123,479 129,672
Research and Development 6,366 6,607 21,694 19,825
Marketing 12,754 9,400 34,788 26,743
General and Administrative 34,318 40,861 108,677 120,727
Interest Expense 634 1,556 2,037 4,260
___________ __________ ___________ __________
96,597 103,585 290,675 301,227
___________ ___________ ___________ _________
NET INCOME (LOSS) 18,209 14,610 63,041 29,836
___________ ___________ ___________ _________
----------- ----------- ----------- ---------
NET INCOME (LOSS) PER
COMMON SHARE (Note 7) .001 .001 .004 .002
___________ ___________ ___________ _________
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
(Note 7) 13,806,511 13,806,511 13,806,511 13,806,511
----------- ----------- ----------- ----------
----------- ----------- ----------- ----------
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
BIOSYNERGY, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
NINE MONTHS ENDED JANUARY 31, 1996
Unaudited
<CAPTION>
Additional
Common Stock Paid-in
Shares Amount Capital Deficit Total
_____________ _________ __________ __________ ________
<S> <C> <C> <C> <C> <C>
BALANCE
MAY 1, 1995 13,806,511 632,663 100 (445,488) 187,275
NET PROFIT (LOSS) - - - 63,041 63,041
SALE OF COMMON STOCK - - - - -
____________ __________ _________ __________ _________
BALANCE
JANUARY 31, 1996 13,806,511 632,663 100 (382,447) 250,316
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
BIOSYNERGY, INC.
STATEMENTS OF CASH FLOWS
Unaudited
<CAPTION>
NINE MONTHS ENDED JANUARY 31,
1996 1995
___________________________
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income (Loss) 63,041 29,836
Adjustments to Reconcile Net Cash Used for
Operating Activities:
Depreciation and Amortization 5,826 6,977
Changes in Operating Assets and Liabilities:
(Increase) Decrease in Accounts Receivable (5,469) (12,265)
(Increase) Decrease in Inventories (3,170) 9,473
(Increase) Decrease in Prepaid Expenses (225) (1,564)
Increase (Decrease) in Accounts Payable
and Accrued Expenses (27,633) (8,748)
_________ __________
Net Cash Provided (Used) by Operating
Activities 32,370 23,709
_________ __________
INVESTING ACTIVITIES:
(Increase) Decrease in Due From Affiliate ( 16,351) (11,775)
(Increase) Decrease in Equipment - (1,049)
(Increase) Decrease in Deposits 1,242 -
_________ __________
Net Cash Provided (Used) by Investing
Activities (15,109) (12,824)
_________ __________
FINANCING ACTIVITIES:
Proceeds from Borrowing (Repayments) (11,788) (6,214)
__________ __________
Net Cash Provided (Used) by Financing
Activities (11,788) (6,214)
__________ ___________
Increase (Decrease) in Cash and Cash
Equivalents 5,473 4,671
__________ __________
Cash and Cash Equivalents at Beginning
of Period 4,520 6,174
__________ __________
Cash and Cash Equivalents at End of Period 9,993 10,845
__________ __________
---------- ----------
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
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 January 31, 1996:
<TABLE>
S T O C K O F A F F I L I A T E S
_____________________________________
<CAPTION>
F.K. Suzuki
Stevia Biosynergy International Medlab
Stock Owner Company Inc. Inc. Inc.
___________ ________ __________ _____________ _______
<S> <C> <C> <C> <C>
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
</TABLE>
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.
<PAGE>
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 January 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. Stevia Company,
Inc. Common Stock had an estimated market price of less than $.01
as of January 31, 1996.
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.:
January 31, 1996 - $253,737
April 30, 1995 - $237,597
At April 30, 1995 and January 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:
January 31, 1996 - $12,620
April 30, 1995 - $12,409
At April 30, 1995 and January 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.
As of January 31, 1996 and April 30, 1995, the Company had
certain outstanding loans due to Fred K. Suzuki, President of the
Company. See Note 9.
See also Note 5.
4. Inventories:
Components of inventories are as follows:
<PAGE>
BIOSYNERGY, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 1995 January 31, 1996
______________ ________________
Raw Materials $ 29,395 $ 29,912
Work-in process 12,136 15,073
Finished Goods 3,416 3,132
_______________ ________________
$ 44,947 $ 48,117
_______________ ________________
--------------- ----------------
5. Common Stock:
As of January 31, 1996, under an employee stock incentive
plan adopted in 1983, stock options and stock appreciation rights
for 131,500 shares of stock were granted to four advisors,
directors, officers, consultants, and/or employees of the
Company. The exercise price is $.05 per share. The Company
reserved 350,000 shares of its common stock for this plan. Under
the plan, stock options may be granted with respect to shares
subject to expired stock options. As permitted in the plan, the
directors of the Company extended the termination date (last date
to grant options) of the plan from May 19, 1986 to December 31,
1989. No further action has been taken to extend the term of the
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 1,245,333 shares of the Company's common stock were subject to
Mr. Suzuki's option at January 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 January 31, 1996, no
portion of this Option 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.
<PAGE>
BIOSYNERGY, INC.
NOTES TO FINANCIAL STATEMENTS
6. Quasi-Reorganization:
On July 31, 1985, the Company effected a Quasi-
Reorganization which resulted in the elimination of $1,976,417
of accumulated deficit at the date of reorganization and a
decrease of $1,976,417 in the amount of common stock outstanding.
7. 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.
8. Lease Commitments:
The lease agreement for the Company's current facilities
expired January 31, 1996. The base rent under the lease, of
which 15% is allocated to Stevia Company, Inc., for each fiscal
year was as follows:
Year ending April 30 Total Base Rent
____________________ ____________________
1992 $53,466
1993 $57,889
1994 $59,061
1995 $62,574
1996 (to January 31, 1996) $46,931
The Company entered into a new lease for its current
facilities effective February 1, 1996. The annual rent for the
first year of the new lease is $60,500, 15% of which is allocated
to Stevia Company, Inc.
Also included in the lease agreements are escalation clauses
for the lessor's increases in property taxes and other operating
expenses.
9. Notes Payable:
Notes payable consists of the following:
. $12,100 unsecured note payable to Mr. Suzuki. The
note bears interest at 11.5%, and is due on demand. The balance
of this note at April 30, 1995 was $8,700 and was fully paid on
December 8, 1995.
. $7,587.75 unsecured note payable to Mr. Suzuki. This
note bears interest at 10%, and is due on demand. The balance of
this note at April 30, 1995 and January 31, 1996 was $7,587.75
and $4,500, respectively. This note represents an advance to the
Company for expenses incurred, including legal fees, for the
<PAGE>
BIOSYNERGY, INC.
NOTES TO FINANCIAL STATEMENTS
settlement of a lawsuit. The expenses of this lawsuit were equally
divided between the Company, Mr. Suzuki, Stevia Company, Inc. and
F.K. Suzuki International, Inc., affiliates of the Company.
10. Income Taxes:
At April 30, 1995, net operating loss carryforwards were available and
expire, if not used, as follows:
Year Ending Net Operating
April 30, Losses
_____________ _______________
1998 $ 374,111
1999 677,671
2000 455,166
2001 449,142
2002 132,470
2003 85,822
2004 41,176
2006 160
2007 28,253
______________ _____________
$ 2,243,971
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.
11. Major Customers:
Shipments to one customer accounted for approximately 28.2% of sales
during the nine month period ending January 31, 1996. The outstanding
receivable from this customer was $21,807.20 at January 31, 1996.
12. New Products:
The Company introduced the HemoTemp II Activator last quarter. The
Activator will provide users of HemoTemp II Blood Bags Temperature
Indicators an accurate and reliable source of heat that is ideal for
activation of that product.
13. 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 maintaining or increasing sales
and the ability of the Company to obtain financing, when needed. To this
extent, management has endeavored to introduce the Company's products to
new markets and expand its marketing efforts in the traditional medical
market. Management also intends to continue pursuing financing
opportunities, including selling its common stock to private investors, if
necessary.
<PAGE>
Item 2. MANAGEMENT ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
SALES/REVENUES
--------------
For the three month period ending January 31, 1996 ("3rd Quarter"), the net
sales decreased 2.03% or $2,356, and increased 7.27% or $26,756 during the
nine month period ending January 31, 1996, as compared to net sales for the
comparative periods ending in 1995. This overall increase in sales is the
result of increased sales of a variety of the Company's products rather
than any single product. The decrease in net sales for the 3rd Quarter is
not indictive of any downward trend. As of January 31, 1996, the Company
had no product back orders.
In addition to the above, the Company realized $450 of income as a result
of leasing a portion of its computer time to Stevia Company, Inc., an
affiliate, and $2,621 of miscellaneous income and $54 of interest income
for the nine month period ending January 31, 1996.
INCOME/LOSS
-----------
The Company realized a net profit of $18,209 during the 3rd Quarter as
compared to a net profit of $14,610 for the comparative quarter in the
prior year. The Company also realized a net profit of $63,041 for the nine
month period ending January 31, 1996, as compared to a net profit of
$29,836 during the same period in 1995. The increase in income is a result
of a decrease in expenses and an increase in sales for the nine month
period ending January 31, 1996. 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, 1995, the Company has incurred net operating losses
aggregating $2,243,971. As a result of net operating loss carryovers, no
income taxes were due for Fiscal 1995 and will unlikely be due for Fiscal
1996. 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 10 of the "FINANCIAL STATEMENTS."
EXPENSES
--------
GENERAL
-------
The operating expenses incurred by the Company during the 3rd Quarter
decreased overall by 6.74% or $6,988, and decreased by 3.5% or $10,552 for
the nine month period ending January 31, 1996. These fluctuations were not
overall 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.
<PAGE>
COST OF SALES AND OTHER OPERATING CHARGES
_________________________________________
The cost of sales and other operating charges during the 3rd Quarter
decreased by $2,002, and decreased by $6,193 during the nine month period
ending January 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
37.89% during the 3rd Quarter and 38.84% for the same quarter ending in
1995, and 35.22% during the nine month period ending January 31, 1996
compared to 39.67% in 1995. The overall decrease in cost of sales and
operating charges for the nine month period ending January 31, 1996, as a
percentage of sales, was due primarily to an increase in sales on a unit
basis with a corresponding improved production efficiency.
RESEARCH AND DEVELOPMENT
________________________
Research and Development costs decreased by $241 or 3.65% during the 3rd
Quarter, as compared to the same quarter in 1995. These costs increased by
$1,869 or 9.43% during the nine month period ending January 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 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 be offset by research revenues.
MARKETING
---------
Marketing costs for the 3rd Quarter increased by $3,354 or 35.68%, as
compared to the Quarter ending January 31, 1995, and increased $8,045 or
30.08% during the nine month period ending January 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 $6,543 or 16.01% during the
3rd Quarter and decreased by $12,050 or 9.98% during the nine month period
ending January 31, 1996, as compared to the same period ending in 1995.
This was primarily due to a decrease in salaries and associated employee
expenses as the result of the Company's bookkeeper resigning in May, 1995.
ASSETS/LIABILITIES
------------------
GENERAL
-------
Since April 30, 1995, the Company's assets and liabilities have not
materially changed.
DUE FROM AFFILIATES
-------------------
The Company was owed $253,737 by Stevia Company, Inc. ("Stevia"), an
affiliate, and $12,620 by F.K. Suzuki International, Inc. ("FKSI"), an
affiliate, at January 31, 1996. These affiliates owed $237,597 and $12,409
<PAGE>
at April 30, 1995, respectively. These accounts primarily represent common
expenses which are charged by one company to the other for reimbursement.
These expenses include certain rent, salaries for common employees,
insurance and employee benefits, and legal fees. Beginning May 1, 1994, a
greater portion of these common expenses were allocated to the Company to
reflect the decreasing activity of Stevia Company, Inc. and the increased
activity of the Company. 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, .69 to 1, has improved
compared to .50 to 1 at April 30, 1995. 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 nine month period ending January 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 nine month period ending
January 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 and has a working capital deficit, 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.
Finally, Management intends to continue 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 able to obtain a working line
of credit on acceptable terms. Irrespective of the Company's deficit in
working capital, the Company has not been refused goods or services from
any of its vendors.
Since the Company does not have an operating line of credit, the Company's
President, Fred K. Suzuki, has made loans to the Company during the past
two fiscal years for working capital purposes. See Footnote 9 of the
"Financial Statements". There can be no assurance such loans will be
available in the future or on terms acceptable to the Company.
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.
<PAGE>
(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) Promissory Note dated March 2, 1993, in the amount of
$12,100 payable to Fred K. Suzuki. (iii)
(d) Promissory Note dated July 1, 1993, in the amount of
$7,587.75 payable to Fred K. Suzuki. (iii)
(15) Letter dated March 14, 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.
<PAGE>
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 15, 1996 ____________________________________
Fred K. Suzuki, President, Chairman of
the Board, Chief Accounting Officer
and Treasurer
Date March 15, 1996 ____________________________________
Lauane C. Addis
Secretary, Corporate Counsel
and Director
<PAGE>
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 15, 1996 /s/ FRED K. SUZUKI /s/
______________________________
Fred K. Suzuki
President, Chairman of the
Board, Chief Accounting
Officer and Treasurer
Date March 15, 1996 /s/ LAUANE C. ADDIS /s/
_____________________________
Lauane C. Addis, Secretary,
Corporate Counsel and
Director
<PAGE>
___________________________________________________________________________
___________________________________________________________________________
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 January 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
___________________________________________________________________________
___________________________________________________________________________
<PAGE>
EXHIBIT INDEX
_____________
Page Number
Pursuant to
Sequential
Exhibit Numbering
Number Exhibit System
__________ __________ _______________
27 Financial Data Schedule E-1
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF THE REGISTRANT FOR THE NINE MONTH PERIOD ENDING JANUARY 31, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> APR-30-1996 APR-30-1996
<PERIOD-END> JAN-31-1996 JAN-31-1996
<CASH> 9,993 9,993
<SECURITIES> 0 0
<RECEIVABLES> 63,621 63,621
<ALLOWANCES> 500 500
<INVENTORY> 48,117 48,117
<CURRENT-ASSETS> 126,089 126,089
<PP&E> 166,252 166,252
<DEPRECIATION> (161,999) (161,999)
<TOTAL-ASSETS> 432,939 432,939
<CURRENT-LIABILITIES> 182,623 182,623
<BONDS> 0 0
<COMMON> 632,663 632,663
0 0
0 0
<OTHER-SE> (382,447) (382,447)
<TOTAL-LIABILITY-AND-EQUITY> 432,939 432,939
<SALES> 113,905 350,591
<TOTAL-REVENUES> 114,806 353,716
<CGS> 43,159 123,479
<TOTAL-COSTS> 43,159 123,479
<OTHER-EXPENSES> 19,120 56,482
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 634 2,037
<INCOME-PRETAX> 18,209 63,041
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 18,209 63,041
<EPS-PRIMARY> .001 .004
<EPS-DILUTED> .001 .004
</TABLE>
