UNITED STATES
                          SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
                                     FORM 10-K

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

                          For the fiscal year ended 4/30/98

                                         OR

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

                          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

         Securities registered pursuant to Section 12(b) of the Act:
         Title of each class                Name of each exchange on which 
                                            registrant

         NONE                               NONE             

         Securities registered pursuant to section 12(g) of the Act:
         Common Stock, No Par Value                             
         (Title of class)

      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        .
          -------     -------
    
      Page One of 53 pages contained in the sequential number system.  The
      Exhibit Index may be found on page E-i of the sequential numbering
      system.

<PAGE>

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
      405 of Regulation S-K is not contained herein, and will not be
      contained, to the best of registrant's knowledge, in definitive proxy
      or information statements incorporated by reference in Part III of this
      Form 10-K or any amendment to this Form 10-K [X]

      The aggregate market value of the voting stock and non-voting stock
      held by non-affiliates of the registrant on April 30, 1998 cannot be
      ascertained with any certainty because there is no established trading
      market due to limited and sporadic trades.

      The number of shares of common stock outstanding on April 30, 1998 was
      13,806,511.

      No documents have been incorporated by reference in this report except
      for certain exhibits and schedules listed in Item 14.

                                Part I

       Item 1. Description of Business
               General Development of Business

  Biosynergy, Inc. (the "Company") was incorporated as an Illinois corporation
  on February 9, 1976.  The Company was formed primarily for the purpose of
  developing, manufacturing, and marketing products utilizing cholesteric
  liquid crystals.  The Company presently manufactures and markets disposable
  medical, laboratory and industrial thermometric and thermographic cholesteric
  liquid crystal devices.

  Although the Company did not enter into any agreements materially affecting
  its operations during Fiscal 1998, the Company extended its contract with the
  American Association of Blood Banks for two years.  See "Marketing and
  Distribution."  The Company experienced an increase in sales during fiscal
  1998.  The Company's sales of $529,460 were the highest since fiscal 1982.
  The Company realized a profit of $99,351 for the fiscal year ending April 30,
  1998 compared to $88,963 for fiscal 1997.  See "Management's Discussion and
  Analysis of Financial Condition and Results of Operations."

<PAGE>

  The Company continued to introduce its products directly to industrial
  customers during Fiscal 1998.  Although the Company did not make any material
  sales to customers in the industrial markets, the Company submitted various
  proposals to potential customers for use of its time/temperature technology.
  Although the ultimate results of these activities are not known, Management
  believes there is a need for its products and technology in the industrial
  markets.

  Except as stated above, there were no other significant contracts or
  developments with regard to the Company's business during the past fiscal
  year.

  Financial Information About Industry Segments

  The Company generated revenues from sales of eleven medical and laboratory
  products in the medical and laboratory industry segment during the fiscal
  years ended April 30, 1998, 1997 and 1996.  For a description of these
  products, see "Narrative Description of Business" below.

  Below is a schedule which presents the sales for each product and the
  percentage of the Company's total sales attributable to each product for the
  fiscal years ending April 30, 1998, 1997 and 1996.

<TABLE>
<CAPTION>

                                                      Fiscal Year Ending
                                                        April 30, 1998        
              Medical and                                                     
              Laboratory                        Sales of        Percentage
              Products                          Product        of total Sales
              ----------------------            ------------   --------------
             <S>                                <C>            <C>
              HemoTempR II BMD                  $444,005.90           83.8%
              TempTrendR TI                       31,165.50            5.9%
              TempTrendR II TTD                   13,136.00            2.5%
              HemoTempR BMD                       12,574.60            2.4%
              LabTempR 20 ST                       6,796.00            1.3%
              LabTempR 40 ST                       6,688.50            1.3%
              Miscellaneous (1)                    5,926.50            1.1%
              HemoTempR II Activator               5,570.00            1.0%
              Vena-VueR VAD                        2,070.00             .4%
              StaFreezR FTI                        1,527.00             .3%   
                                                -------------  --------------
                                                $529,460.00(2)       100.0%
</TABLE>
<TABLE>

                                                    Fiscal Year Ending
                                                      April 30, 1997 
                                              -------------------------------
        
              Medical and                                         Percentage
              Laboratory                      Sales of             of Total
              Products                         Product               Sales    
              ------------------              ----------------    ------------
              <S>                             <C>                 <C>       

              HemoTempR II BMD                 $415,616.20            82.7%
              TempTrendR TI                      29,215.50             5.8%
              TempTrendR II TTD                  15,708.00             3.1%
              HemoTempR BMD                      14,496.00             2.9%
              LabTempR 20 ST                      9,042.50             1.8%
              HemoTempR II Activator              6,164.00             1.3%
              LabTempR 40 ST                      5,589.50             1.1%
              Vena-VueR VAD                       2,635.00              .5%
              Miscellaneous (1)                   1,517.00              .5%    
              StaFreezR FTI                       2,576.35              .3%   
                                               $502,560.05(2)        100.0%
</TABLE>
<TABLE>
<CAPTION>
                                              Fiscal Year Ending
                                                April 30, 1996           
              Medical and                                      Percentage
              Laboratory                Sales of                of Total
              Products                   Product                Sales 
              ----------------------    ---------------        --------------  
              <S>                       <C>                    <C>    
              HemoTempR II BMD            $365,243.30              80.3%
              TempTrendR TI                 34,174.90               7.6%
              TempTrendR II TTD             18,422.50               4.1%
              HemoTempR BMD                 13,329.00               2.9%
              LabTempR 20 ST                 7,884.50               1.7%
              HemoTempR II Activator         6,423.00               1.4%
              LabTempR 40 ST                 4,587.00               1.0%
              Vena-VueR VAD                  2,000.00               0.4%
              Miscellaneous (1)              1,487.45               0.3%
              StaFreezR FTI                  1,232.00               0.3%   
                                          $454,783.65(2)          100.0%
              
---------------
<FN>
(1) Includes sales of LabTempR 60, L.C. Sheets, Tempa.SlideTM, and special
order thermometric and thermographic consumer and laboratory products.

(2) Includes discounts and returns.
</FN>
</TABLE>

See "Information About Foreign and Domestic Operations and Export Sales".
See also "Selected Financial Data" and "Financial Statements and Supplement-
ary Data" for the operating profit and loss and identifiable assets related
to the Company's operations in its industry segment.

<PAGE>

Narrative Description of Business.

As described in "General Development of Business", the Company is presently
engaged in the business of developing, manufacturing, and marketing
disposable thermometric and thermographic temperature indicators for the
medical and laboratory and industrial markets.  Further information about
this business segment and proposed products of the Company are described
below.

Thermographic and Thermometric Devices and Accessories.

During the fiscal year ending April 30, 1998 the Company manufactured and
marketed various medical, laboratory and consumer thermometric and thermo-
graphic devices.  These products were sold to hospitals, clinical end-users,
laboratories and product dealers.

1.  The HemoTempR Blood Monitoring Device ("BMD") is designed to be a human
blood bag temperature indicator.  Human blood must be maintained, optimally,
at 1-6o C., and not allowed to exceed 10o C.  Since human blood is always in
short supply, it is critical that blood be maintained within these specifica-
tions to avoid loss.  

HemoTempR BMD monitors the core temperature of a blood bag from 1-12o C., and
replaces the impractical mercury thermometer susceptible to breakage.  

HemoTempR BMD once attached to the blood bag is usablethroughout the life of
the blood.

2.  HemoTempR II BMD (patented 1989) is designed to warn blood bank personnel
whenever the internal temperature of the blood bag has exceeded 10-11o C.
HemoTempR II BMD has an irreversible  indicator that is activated when the tag
is applied to the blood bag at approximately 4o C.  After being activated, the
irreversible indicator remains blue colored for 72 hours unless the blood is
warmed to a temperature of 10-11o C. or above, in which case the indicator
loses its blue color.  The  irreversible indicator will not return to blue
even if the blood is subsequently recooled, indicating that the blood has
been warmed.  The reversible portion of the indicator reversibly monitors
temperatures from 1-9o C.  HemoTempR II BMD  is non-reusable and must be
replaced each time the blood bag is returned to the blood bank and reissued.

3.  HemoTempR II Activator, introduced during Fiscal 1995, is an  electronic,
portable block model heater developed to provide a reliable source of heat
necessary to activate the Company's  HemoTempR II BMD.  The HemoTempR II
Activator has a thermostatic control to permit precise setting and continuous
control of temperatures in the range for activation of the Company's HemoTempR
II BMD.  This device is intended by the Company to be used with HemoTempR II
BMD as a system for blood monitoring.  This device is the only product sold
by the Company during Fiscal 1997 which is not manufactured by the Company.

<PAGE>

4.  TempTrendR Temperature Indicator ("TI") is primarily used to  monitor the
temperature of urine specimens collected for drug  testing to detect
fraudulent urine specimens.  Most common forms of drug testing require a
urine specimen.  However, the  test is valid only if a legitimate urine
specimen is collected  which has not been altered by the subject to mask a
drug abuse  problem.  In order to eliminate altered or fraudulent urine 
specimens in tests on federal employees, federal government guidelines
require that urine temperature be measured within  four minutes of sample
collection, and that the temperature be  90.5-98.9o F.  Temperature measure-
ments taken with TempTrendR  TI are simply a matter of observing the color
illuminated number and recording the temperature.  TempTrendR TI also
provides a non-invasive method of monitoring the actual surface temperature
trends of any body surface where temperature measurement is important, such
as near joints in rheumatoid arthritis and to assess blood circulation.

5.  TempTrendR II Temperature Trend Device ("TTD") is a second generation
temperature trend device which is correlated to internal body temperature and
provides a non-invasive, readily visible means of monitoring changes in body
temperature. TempTrendR II TTD will reflect oral temperatures such as those
taken by glass thermometers.  TempTrendR II TTD is used intraoperatively to
warn of developing hyper or hypothermic   conditions.  The indicator is also
excellent for monitoring a patient's temperature during any type of transfusion
procedure.      

6.  LabTempR 20, LabTempR 40 and LabTempR 60 Surface Temperature Indicators
("STI") are designed to reversibly indicate the temperature of laboratory
materials which require specific storage or use temperatures.  LabTempR 20 STI
indicates temperatures between 0-21o C., LabTempR 40 STI monitors temperatures
between 19-21 and 24-41o C., while LabTempR 60 STI measures temperatures
between 40-60o C.  These thermometers are designed to monitor the temperature
and changes in temperature of hundreds of laboratory chemicals and supplies
which require specific temperature conditions; however, these thermometers
are suitable for temperature measurement of any surface.

7.  Tempa.SlideTM Temperature Indicator ("SLTI") is amicroscope glass slide
temperature indicator.  The SLTI helps the viewer read the optimum temperature
of a slide by indicating in large  visible colors when the desired slide
temperature is reached.  Tempa.SlideTM can be mounted on a glass microscope
slide and can be used continuously for over one year.  These thermometers are
suitable for temperature monitoring of glass slides during antibody/antigen
tests when an optimum temperature of the cells and protein must be maintained
for accurate test results.

<PAGE>

8.  StaFreezR Freeze-Thaw Indicator ("FTI") is a freeze-thaw indicator which
will irreversibly indicate whether frozen material is warmed to greater than
-20o C.  Once the frozen product exceeds -20o C., the liquid crystal film will
turn from blue to gray to black, and refreezing the product at a lower
temperature will not bring back the original frozen state color.

9.  The Vena-VueR Vein Assessment Device ("VAD")  is designed to locate good
veins by assessing blood flow, and to assess vein depth, and size.  It is
used primarily to minimize complications and reduce discomfort for geriatric
patients, obese patients, diabetic patients, burn patients, drug addicts with
sclerosed veins, shock patients with collapsed veins and long-term hospitalized
or cancer chemotherapy patients with severely damaged and traumatized
veins.  However, Vena-VueR VAD is also useful in helping to select the most
patent and least traumatized veins for the purpose of any venipuncture. Three
efficacy medical publications have been written about Vena-VueR VAD.

10.  Specialty products include devices manufactured to the specification and
design of the customer, such as time/ temperature shipping labels for food
products under the tradename FoodGardeTM Time/Temperature Indicators and
liquid crystal thermometers for general purpose thermometry.  The Company
anticipates continued manufacturing of these and additional specialty
products in the future.

The Company is also developing other devices.  These include:

1.  The Company intends to market new irreversible time/ temperature
indicators which will be used as shipping labels, and in other forms, for the
frozen food packaging industry (under the tradename FoodGardeTM), the
pharmaceutical industry, and for other industries requiring careful
monitoring of refrigerated or frozen materials.  The devices will have
irreversible color changes at various temperatures determined to be critical
by the end-user.  Therefore, a purchaser, whether an individual consumer or
a merchant, will be able to instantaneously determine the temperature history
of the material.  Although the liquid crystal formulations are substantially
completed, the Company is uncertain at this time when these products will be
sold.

2.Hemo-CoolTM Thermoelectric Blood Cooling/Storage System ("TBCSS") is a
self-contained, portable blood storage and shipping device for use in
shipping whole blood from the blood bank to surgery, in the hospital setting,
or to other destinations outside the hospital.  The device operates similar
to a portable refrigerator with a DC power supply, which is designed to
maintain a constant temperature suitable for human blood.  The cooling device
is portable and can be used for storage and shipping of various other
biologicals that have to be maintained at a constant refrigerated temperature.

<PAGE>

3.  The Company has recognized a need exists for a simple, inexpensive
indicator to determine if sensitive materials have been subjected to freezing
temperatures.  The Company is continuing its investigation of the feasibility
of such an indicator.

4.  The Company has become aware that a need exists for products to augment
its current product line, such as the HemoTempR II Activator.  The Company is
investigating the feasibility of additional products to systematize the use
of its thermometric and thermographic liquid crystal devices as  well as
alternative technologies to supplement its current product line.  The results
of such investigations are not predictable at this time.

The Company is currently investigating alternative thermometric and
thermographic technologies for use in applications where the Company's
current products are unsuitable.  Since the investigation of these alternative
technologies is not complete, there can be no assurance the Company will
be able to develop any commercial products as a result of this activity.

Manufacturing.  The Company manufactures all of its products except for the
HemoTempR II Activator and Hemo-CoolTM TBCSS.  These products are manufactured
for the Company by unrelated companies on an as needed basis.  Raw materials
for the Company's other products are purchased, but all manufacturing is
performed at the Company's production facility.  All outside manufacturing is
done to specifications set by the Company.  There are no commitments or firm
agreements for outside manufacturers to provide products for the Company, and
the Company does not anticipate it will enter into any such agreements in the
foreseeable future.

The Company has twenty-two years of experience working with various liquid
crystal formulations and thermometric and thermographic application methods.
The Company maintains complete records of manufacturing and quality assurance
testing of all of its products in compliance with Food and Drug Administration
("FDA") regulations.  All products are manufactured according to "good
manufacturing practices" ("GMP") for medical devices.

Marketing and Distribution.  The Company has traditionally targeted the
medical and laboratory markets.  While novel products, such as the Company's
products, enjoy the advantage of no initial competition, they also initially
lack a demonstrated market and acceptance by medical and laboratory
personnel.  Furthermore, cost savings programs and awareness have slowed down
the introduction of new products, particularly in the medical market.  As a
result, the time required to achieve acceptance of the Company's medical
products is significantly increased, in Management's opinion.


<PAGE>

Because of these conditions, the Company has been forced to rely heavily on
its own marketing and distribution efforts in the medical market, rather than
the use of the traditional medical product distributors, for a large portion
of its sales.  Nevertheless, the Company's primary distributor in the United
States, Fisher Scientific Company ("Fisher"), and the Company's other product
distributors have increased their sales of the Company's products throughout
the United States over the past few years.  During Fiscal 1998, Fisher
accounted for 31.3% of the Company's sales.  Although it is difficult to
predict the ultimate success of Fisher and other distributors in selling the
Company's products, management believes this trend will continue.

Effective March 31, 1998, the Company renewed its contract with the American
Association of Blood Banks ("AABB") Group Purchasing Program for two years.
Approximately 2,500 AABB Member Institutions throughout the United States are
eligible to purchase HemoTempR II blood bag temperature indicators and
HemoTempR II Activators at a discount under this contract.  The Company is
required to pay a commission of 2% of all sales under this contract to the
AABB.

The Company continues to negotiate with various medical and laboratory
product companies for the distribution of its products under private labels
and to introduce its products in the industrial, pharmaceutical and
laboratory markets, the success of which cannot be assured.  See "Thermometric
and Thermographic Devices."

At the present time, two employees are engaged on a part-time basis in
marketing the Company's products.  The Company also uses the services of an
in-house sales representative for telemarketing on a commission only basis.
The Company does not have an outside sales force.  Since the Company markets
its products to approximately 7,000 hospitals in the United States, hundreds
of laboratories and industrial end-users in the United States, and thousands
of hospitals and laboratories in foreign countries, it will continue to rely
upon the marketing efforts of independent dealers and sales representatives,
and is therefore aggressively seeking distributors for its products
throughout the world.  The effect these independent dealers will have on
revenues has not yet been determined.

The Company is unaware of its current market share for its medical and
laboratory products, although the Company is currently collecting data to be
used in marketing studies in the future.


Sources and Availability of Raw Materials.  In general, the Company believes
its sources and availability of raw materials to be satisfactory.  Presently,
there are a limited number of domestic manufacturers of liquid crystal
chemicals.  Although it is expected that these domestic manufacturers will

<PAGE>

continue to supply the raw liquid crystals needed for the production of the
Company's products, which cannot be assured, if industrial quantities of raw
liquid crystals are unavailable from domestic sources, the Company will need
to import these materials from foreign suppliers, or, as an alternative,
manufacture such materials itself.  Other materials are currently available
from a variety of suppliers.

Patents and Trademarks.  The Company has been granted or assigned five United
States and four foreign patents relating to liquid crystal technology.  Four
of the United States patents and all of the foreign patents, generally
related to liquid crystals or liquid crystal dispersion processes, have
expired.  The other patent relating to cholesteric liquid crystal formula
tions and temperature monitoring means for the Company's irreversible liquid
crystal products (No. 4,859,360), expires on August 22, 2006.  Although
several of the Company's patents have expired, management does not believe
this will have an adverse material impact on the Company's operations,
revenues or properties.

The Company has received registered trademark protection on all product names
to date, excepting Temp-D-TekTM, Tempa.SlideTM, FoodGardeTM,  LaproVueTM and
Hemo-CoolTM.  The Company has retained, however, all the rights to the Temp-D-
TekTM,  Temp.SlideTM, FoodGardeTM, LaproVueTM and Hemo-CoolTM common law
trademark.  Additional trademark registrations will be applied for as needed.

Although patent and trademark protection is important, the Company believes
no material adverse effects to the Company's operations will result in the
event additional patents and/or trademarks are not obtained, or, if attained,
such patents and/or trademarks are held to be invalid.  Certain processes and
chemical formulas will be maintained only as trade secrets.  Management feels
that it will be difficult for potential competition to analyze or reproduce
the secret processes and formulas without substantial expenditures of capital
and resources.

Seasonal Aspect of Business.  The business of the Company is not seasonal.

Working Capital Items.  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.

<PAGE>

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 April 30, 1998, the Company had $161,092 of current assets available.
Of this amount, $50,148 was inventory and $75,955 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, 1999 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 will be necessary to obtain
additional financing to cover working capital items and keep current trade
accounts payable, of which there can be no assurance.  See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

Major Customers.  Fisher, the Company's primary independent product distribu-
tor, was directly responsible for 31.3% or more of the Company's net sales
during the fiscal year ending April 30, 1998.  No other customer or
distributor accounted for 10% or more of the Company's net sales during the
past fiscal year.  At April 30, 1998, Fisher owed the Company $26,723.
Management believes the loss of this customer would materially reduce the
revenues of the Company until the Company could retain the services of
another major product distributor.

Backlogs.  The Company had backorders of $7,453 as of April 30, 1998.  All
back orders have been filled.

Government Contracts.  The Company does not have a material portion of its
business that may be subject to renegotiation of profits or termination of
contracts or subcontracts at the election of any government entity.

Competition.  The Company has no known commercial competitors of its
disposable vein assessment device or blood monitoring devices using liquid
crystal technology.  Because of the Company's patent position, employment
agreements with former employees, and processing trade secrets, it does not
anticipate competition in these areas in the near future.  In the area of
laboratory temperature monitoring, there are no other competitors who market
an infinitely thin liquid crystal temperature indicator.  In the area of a
frozen food or drink safety indicator, there is no competition known to the
Company that utilizes liquid crystal technology.  The Company believes that
the frozen food industry presently uses primarily physical and organoleptic
evaluation (e.g., evaluation of softness, texture, aroma, taste and the
like), as well as mercury thermometers and temperature sensitive inks to

<PAGE>

monitor freshness.  Labels containing wax encapsulated dyes with specific low
melting points and capillary action products produced by 3M under the
tradename MonitorMarkR and polymer/monomer indicators from Lifeline are also
available.

The Company's HEMOTEMPR II BMD (blood bag temperature monitor) competes in the
medical market against Safe-T-Vue (MonoTech) and MonitorMark (3M).
Management of the Company believes that the MonoTech and 3M products are
technically inferior to HEMOTEMPR II BMD in that they provide only an
irreversible monitor with nothing to warn the user that blood is approaching
an unsafe temperature.  In addition, the MonoTech product must be refrigerated
prior to use, and, because of their design, both products can readily be
dislodged from the blood bag.  There is no known commercial competitors of
the Company's HemoTempR II Activator.

The Company's TempTrendR II competes in the medical market against Temp-A-
Strip (Johnson & Johnson), Stick-Temp (Trademark Sales) and Temp-A-Dot (PyMaH
Corp).  Stick-Temp is distributed on a limited basis and there is little
information available concerning it.  Management of the Company believes that
the Johnson & Johnson product is less technically advanced than the Company's
TempTrendR TTD and is primarily distributed in the Consumer market.  Temp-A-
Dot is a wax impregnated strip of paper inserted into the mouth to monitor
core temperature.  Although it is reported to cost less than TempTrendR II
thermometers, it has the disadvantage of single reading, invasive methodology
and cannot be used to monitor temperature trends.  Recently, a few private
label indicators have been introduced to the market.  These are manufactured
by Dijinni Industries, PyMaH Corporation, Hallcrest Products and American
Thermometer, who compete with the Company in the consumer market for forehead
temperature indicators and in the drug testing market for urine thermometers.

Other companies, such as Eurand American, are only involved in the manufacture
of liquid crystal raw materials and do not directly compete with the
Company for sale of medical, industrial or consumer products.  Mercury and
electronic thermometers are used in several competitive applications.  They
are generally more costly, non-disposable or not usable in most applications
where liquid crystal thermometry and temperature indicators are utilized.

Research and Development.  During Fiscal 1998, 1997 and 1996, the Company
spent $36,070, $32,265 and $27,995, respectively, on Company-sponsored
research and development activities.  All expenditures for research and
development are expensed currently with the exception of significant
equipment and set-up charges which are capitalized and depreciated or
amortized over their estimated useful life.

<PAGE>

The Company is conducting research and development of products, which are
discussed under "Thermographic and Thermometric Devices."  In this regard,
the Company may require financing to complete the development of these
products.  The success of the Company in obtaining financing for research
and development will largely determine whether the Company will continue the
research and development for such products or expand its research and
development to other products.

Government Regulations.  The Company does not currently plan to market
diagnostic or therapeutic products which are subject to stringent United
States Food and Drug Administration (FDA) review and pre-market approval in
the near future.  Present commercial products of the Company are classified
by the FDA as Class I or Class II.  These are subject only to general
regulations requiring that manufacturers adhere to certain guidelines to
provide reasonable assurance of utility, safety, and effectiveness.  These
guidelines include labeling requirements, registration with the FDA as a
manufacturer, listing of devices in commercial distribution with the FDA,
notification to FDA of devices proposed to be marketed, conformance to
specified current good manufacturing practices in the manufacture of the
devices, conformance to certain record-keeping requirements, and, in the case
of Class II devices, conformance to certain performance standards.  At the
present time, the Company believes that it is in compliance with regulations
set forth by the FDA.

Information About Foreign and Domestic Operations and Export Sales.  The
Company had export sales of $17,077 during the last fiscal year, and export
sales of $22,145 and $16,956 during the fiscal years ending in 1997 and 1996,
respectively.  The Company also believes that some of its medical devices
were sold to distributors within the United States who resold the devices in
foreign markets.  However, the Company does not have any information
regarding such sales, and such sales are not considered to be material.

The Company does not rely on any foreign operations other than its dealers
and marketing representatives in their respective marketing areas.  See
"Marketing and Distribution."  It is anticipated export sales will continue
to be important to the Company although not material to operating revenues or
income of the Company.  Foreign sales are contingent upon, among other
factors, foreign trade regulations, value of the United States Dollar and,
where required, government approval of the Company's products.

Environmental Protection Expenditures.  The Company's operations are not
subject to any federal, state or local laws regulating the discharge of
materials into the environment which materially affect earnings or the
competitive position of the Company, although the Company is subject to such
laws.  There were no material capital expenditures made during the last
fiscal year to comply with such laws, nor are any such expenditures
anticipated for Fiscal 1999.

<PAGE>

Employees.  The Company presently has five full-time employees comprised of
the President (who also presently serves as the Director of Marketing and
Technical Operations), two Vice Presidents and a manufacturing/packaging
employee.  The Company also employs a secretary/receptionist.  Certain
employees of the Company provide limited services, primarily bookkeeping
and clerical, for Stevia Company, Inc., an affiliate of the Company, on an
"as needed" basis, which is not expected to be a material portion of their
time.

Item 2. Properties

The Company's production facilities, research facilities, and administrative
offices are located at 1940 East Devon, Elk Grove Village, Illinois 60007, in
a 10,400 square foot facility leased from an unaffiliated third party.  The
Company sub-leases 1,560 square feet to Stevia Company, Inc., an affiliate.
The lease for these facilities expires on January 31, 2001.  See footnote 9
of the "Financial Statements."

A majority of the Company's Elk Grove Village facility is currently in use;
however, Management believes this facility is adequate for its needs in the
foreseeable future.  Located at the Company's facility is equipment utilized
for research, development, and manufacturing of the Company's products.

Item 3. Legal Proceedings

There is no material litigation threatened or pending against the Company or
any of its properties.

Item 4. Submission of Matters to a Vote of Security Holders.

None


                                PART II

Item 5. Market for Registrant's Common Stock and Related Shareholder Matters.

Market Information.  Although the common stock of the Company is traded in
the over-the-counter market, there is no established public trading market
due to limited and sporadic trades.  Information regarding these trades is
compiled by the Stock Section of the National Daily Quotation Service ("Pink
Sheets") and selected broker-dealers trading such common stock.  These quota-
tions do not necessarily reflect actual transactions nor represent the actual
value or trading price of the Company's common stock.  Such over-the-counter
quotations reflect inter-dealer prices, without retail markup, markdown, or
commission.  Trading and pricing information for Fiscal 1996, 1997 and 1998
was not available to the Company, although the management of the Company does
not believe there were sufficient trades to establish a market for its common
stock.

<PAGE>

Holders.  As of April 30, 1998, there were approximately 854 shareholders of
record of the Company's common stock.

Dividends.  The Company has never declared any dividends and does not intend
to do so until such time as the Company sustains a profitable status and has
provided for all of its capital requirements.

Item 6. Selected Financial Data

<TABLE>
<CAPTION>
                                    Fiscal Years Ending
                   ------------------------------------------------------- 
                    1998         1997       1996        1995        1994 
                   -------------------------------------------------------    
<S>                <C>         <C>        <C>         <C>         <C>
   
Operating Revenues $529,460     $502,560   $454,784    $443,337   $403,963
Other Revenues        3,460        8,104      5,677       6,863      4,445
Net Income/(Loss)    99,351       88,963     92,197      47,824     24,513
 after Taxes
Net Income/(Loss)     .0072        .0064      .0066       .0035       .002
 per Share After
 Taxes

Total Assets        521,062      455,579    428,331     409,320    395,722
Long Term Debt          -           -          -           -          -    
Stockholder Equity/
  (Deficit)         467,786      368,435    279,472     187,275    139,451
</TABLE>

Item 7.   Management's Discussion and Analysis of Financial                
              Condition and Results of Operations

Net Sales.  Net sales for the fiscal year ending April 30, 1998 were $26,900,
or 5.4%, higher than the previous fiscal year, and $74,676, or 16.42%, higher
than the fiscal year ending in 1996.  The increase in sales during Fiscal
1998 was due to the growing acceptance of the Company's HemoTempR II blood
temperature indicators.  The Company experienced an increase of $28,390, or
6.8%, in sales of its HemoTempR II product in Fiscal 1998 as compared to
Fiscal 1997, and an increase of $50,373, or 14%, in Fiscal 1997 as compared
to Fiscal 1996.  

Other Revenues.  During Fiscal 1998, the Company realized $3,460 of
miscellaneous income.  This income was related to leasing a portion of its
computer time to Stevia Company, Inc., an affiliate, sub-leasing a portion of
the Company's storage space to a non-affiliate, and contract printing for a
non-affiliate.

<PAGE>

Costs and Expenses.  Costs and expenses for the fiscal year ending April 30,
1998 increased by $11,868 compared to the fiscal year ending in 1997, and
increased by $52,525 as compared to the fiscal year ending in 1996.  The
overall increase in costs and expenses for Fiscal 1998 were generally related
to a company wide increase in salaries and wages and increased production
costs related to increased sales.  Generally, with the exception of the
increase in employee salary and related expenses, the overhead expenses of
the Company have remained substantially constant.  In order for the Company
to continue without materially altering its present operations, the overall
operating costs and expenses for the ensuing fiscal year are expected to be
similar to or slightly higher than those of the last fiscal year.

Cost of Sales.  As a percentage of net sales, the cost of sales was 35.77%
for the fiscal year ending April 30, 1998, 36.94% for the fiscal year ending
in 1997 and 35.81% for the fiscal year ending in 1996.  The Company expects
that the cost of sales as a percentage of net sales will remain substantially
the same over the next fiscal year in the absence of a material decrease in
sales or increase in raw material cost.

Research and Development Expenses.  Research and development expenses
increased during the fiscal year ending in 1998 by $3,805, or 11.79%, as
compared to the fiscal year ending in 1997, and increased by $13,161, or
47.01%, as compared to the fiscal year ending in 1996.  Historically, the
Company's research and development activities were limited to improvement of
the current product line and development of products which were natural
extensions thereof.  Recently the Company has noted there appears to be a
need for other products and accessories complimentary to its current product
line.  These products will help systematize the use of the Company's current
products.  As an example, the Company developed the HemoTempR II Activator.
See "Narrative Description of Business - Thermographic and Thermometric
Devices and Accessories."  Although the Company intends to continue to
improve its current product line, the Company is also investigating the
possibility of developing other products using technologies other than liquid
crystal technology to augment its current product line.  Although it is not
anticipated that the development of such products will materially increase
the Company's research and development expenses, there is insufficient
information available to determine the extent the Company will be required to
allocate its resources to develop these products.  In addition, the Company
will continue to develop products pursuant to contracts with unrelated
entities.  The increase in research and development costs as a result of such
development contracts will be directly related to the revenues derived
therefrom.

<PAGE>

Marketing Expenses.  The Company's marketing expenses were $51,077 in 1998
and $54,075 in 1997, as compared to $45,685 for the fiscal year ending in
1996.  The Company continues to increase its marketing activities which
management believes is necessary to continue the Company's growth.  Included
in marketing expenses for Fiscal 1998 are commissions related to an
unsalaried salesperson.

General and Administrative Expenses.  The Company's general and administrative
costs increased by $7,475 as compared to the 1997 fiscal year, and
increased by $13,399 as compared to the fiscal year ending in 1996.  The
increase was primarily the result of company wide increases in salaries and
wages.  See "Cost and Expenses" above.  Management of the Company has
generally stabilized general and administrative expenses.  Except for
extraordinary items, and salary and related employee expenses, it is unlikely
general and administrative expenses will materially change during Fiscal
1999.

Net Income/Loss.  The Company experienced a net income of $99,351, an
increase of $10,388 over Fiscal 1997, and an improvement of $7,154 over
Fiscal 1996.  The overall increase in net operating income is primarily due
to an increase in product sales.  See "Net Sales" and "Costs and Expenses"
above.  Management realizes that the continued profitability of the Company
depends upon improving and maintaining sales of the Company's products.  The
Company has continued its efforts to improve sales.  However, there can be no
assurance the Company will be able to continue to increase or maintain the
current level of net sales.

As of April 30, 1998, the Company had net operating loss carryovers
aggregating $1,869,860.  Therefore, no income taxes are due for Fiscal 1998.
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 did 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 to the Financial Statements for the year
ending April 30, 1998.  See "Financial Statements."

Assets.  Since April 30, 1997, the Company's assets have increased by
$65,483.  This is primarily due to increases in amounts Due From Affiliates
(see below).  Other changes in specific items do not reflect changes outside
the ordinary course of business.

The Company was owed $298,335 by Stevia Company, Inc. ("Stevia"), an
affiliate, and $13,221 by F.K. Suzuki International, Inc. ("FKSI"), an
affiliate, at April 30, 1998.  These affiliates owed $278,874 and $12,921 at
April 30, 1997, respectively.  These accounts primarily represent common

<PAGE>

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.  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 owns
liquid resources.  Although management believes it is cost effective to share
common expenses with its affiliates, the Company has reduced the amount of
advances and common expenses charged to Stevia and FKSI until these
affiliates are in a position to reimburse the Company.  Collectability of the
amounts due from the affiliates cannot be assured without the liquidation of
all or a portion of their assets, and thus such receivables have been
classified as non-current assets.

Liabilities.  The Company's overall liabilities have decreased by $33,868
since April 30, 1997.  This is primarily due to improved cash flow from
operations which has been used to satisfy liabilities.  See also "Assets" and
"Liquidity and Capital Resources."

Current Assets/Liabilities Ratio.  The ratio of current assets to current
liabilities, 3.02 to 1, has increased from 1.40 to 1 at April 30, 1997.
Although the Company realized income in Fiscal 1998, the Company used $19,761
of its cash to pay expenses incurred by the Company on behalf of Stevia and
FKSI, which was not reimbursed.  To this extent, the Company's current assets
were converted to long-term receivables thereby reducing its current
assets/liabilities ratio.  In order to continue to improve the current
asset/liability ratio, the Company's operations must remain profitable and
the Company must curtail the use of its current assets for the benefit of
Stevia and FKSI.

Liquidity and Capital Resources.  During the fiscal year ending April 30,
1998, the Company had an increase in net working capital of 72,239.  The
increase in net working capital is primarily due to improved cash flow from
operations which was used to retire company debt.

Cash provided by operating activities was $50,709 during Fiscal 1998, $30,652
during Fiscal 1997 and $42,155 during Fiscal 1996.  This increase primarily
is the result of overall growth and net income from operations.  Although the
Company experiences varying collection periods of its accounts receivable,
the Company believes that uncollectible accounts receivable will not have a
significant effect on future liquidity.

The Company's cash flows from operations are considered adequate to fund the
short term capital needs of the Company.  However, the Company does not have
a working line of credit, and does not anticipate obtaining a working line of
credit in the near future.  There is therefore a risk additional financing
may be necessary to fund long-term capital needs of the Company.  However,
there is no currently known long-term capital needs.

<PAGE>

Due to the limited availability of cash to the Company during the fiscal
years ending April 30, 1996, 1997 and 1998 and the inability of the company
to borrow the funds required, the Company chose not to have its financial
statements audited.  The cost of such an audit would be approximately $15,000
per year.

Effects of Inflation.  With the exception of inventory and labor costs
increasing with inflation, inflation has not had a material effect on the
Company's revenues and income from continuing operations in the past three
(3) years.  Inflation is not expected to have a material effect in the
foreseeable future.

Except for its operating capital needs, the Company does not have any other
material contingencies for which it must provide.

Item 8.  Financial Statements and Supplementary Data.

The information required by this item is set forth in pages F-1 to F-12.

Item 9.  Changes in and Disagreements with Accountants on                 
Accounting and Financial Disclosure.

None.
                                 Part III

The information contained in items 10, 11, 12, and 13 is the same information
to be included in the Registrant's definitive proxy statement, if any, to be
filed with the Commission, and is included herein for convenience only.

Item 10.  Directors and Executive Officers of the Registrant.

The executive officers and directors of the Company are:
   

<TABLE>
<CAPTION>
                                                             
                              Positions              Served in
Name                  Age     with Company           Office Since
________________     _____    _____________________  __________________
<S>                  <C>      <C>                    <C>              
Fred K. Suzuki        68      President, Treasurer,  February, 1976 (1)
Director of Research
and Development,
Director of Marketing
and Sales, and Chairman
of the Board of Directors

Mary K. Friske        38       Vice President ,       September, 1993
Administration,
Manager of Sales

Laurence Mead         36       Vice President,         April, 1994
Manufacturing,
Manager of Financial
and Product Development

Lauane C. Addis       42       Corporate Counsel,      February, 1984   
Secretary and                                          December, 1985
Director                                               February, 1987

James F. Schembri     63       Director                November, 1990

________________
<FN>
              
(1) Mr. Suzuki did not serve as President from August 1982 through February
1983.  Prior to October, 1984, Mr. Suzuki served as Treasurer of the Company,
and was once again appointed Treasurer on June 30, 1991.

</FN>
</TABLE>
<PAGE>

As an incentive for his investment in the Company, the Board of Directors
agreed to nominate James F. Schembri as a candidate for election to the Board
of Directors of the Company.  Other than the foregoing, there are no
arrangements or understandings between any of the directors or officers of
the Company and any other person pursuant to which any director or officer
was or is to be selected as a director or officer.

The term of office for the members of the Board of Directors extends to the
next regular meeting of shareholders or until they resign, and until their
successors are duly elected.  The term of office for the officers of the
Company extends until they resign, are not re-elected by the Board of
Directors, or are otherwise replaced by the Board of Directors of the
Company.

Family Relationships.

Lauane C. Addis is the son-in-law of Fred K. Suzuki.  Otherwise, there is no
family relationship between any director, executive officer, or person
nominated or chosen by the Company to become a director or executive officer.

Involvement in Certain Legal Proceedings.

None of the officers or directors are or have been involved in any legal
proceedings which are material to an evaluation of the ability or integrity
of same.

<PAGE>

Business Experience.

Certain information regarding the business experience of the directors,
officers, significant employees and consultants of the Company are set forth
below:

FRED K. SUZUKI, Jr., Chairman of the Board, President, Treasurer, Director of
Research and Development and Director of Marketing and Sales.  Mr. Suzuki is
founder of the Company and has served as President of the Company since its
inception in 1976 to August 1982 and from February 1983 to the present.  He
has served as Chairman of the Board of Directors of the Company since its
inception to the present, and as Treasurer from its inception to October,
1984 and from July, 1991 to the present.  Mr. Suzuki is also President and
Chairman of the Board of Directors of F.K. Suzuki International, Inc.
("FKSI"), President and Chairman of the Board of Directors of Stevia Company,
Inc. ("Stevia"), President and Chairman of the Board of Directors of Medlab
Products, Inc. ("Medlab"), affiliates of the Company.  Mr. Suzuki is the sole
owner, President and Director of Suzuki International, Inc. ("SI").  FKSI is
a holding company of Medlab, Stevia, and the Company.  As such, it has no
other business operations.  See "Security Ownership of Certain Beneficial
Owners and Management."  Medlab is a dormant company, organized to develop,
manufacture, and market scientific products.  Stevia is in the business of
developing, manufacturing, and marketing natural sweeteners and other
products derived from Stevia rebaudiana plant.  SI is in the business of
marketing various products.  Mr. Suzuki has developed several patents or
patents pending for clinical instruments and has licensed them to unaffiliated
corporations.  These patents do not inure to the benefit of the Company. 

Mr. Suzuki has developed several patents in the area of Diterpene glycosides,
chemistry derived from the Stevia rebaudiana plant.  Mr. Suzuki also holds
patents in the area of liquid crystal chemistry.  Mr. Suzuki attended
Roosevelt University from 1951 to 1954, where he studied Chemistry and
Biology.

MARY K. FRISKE, Vice President - Administration and Manager of Sales.  Ms.
Friske joined the office staff in July, 1983.  Ms. Friske served as an
Executive Secretary for several years and was promoted to Office Manager in
1989.  In September, 1993, Ms. Friske was appointed Vice President -
Administration and Manager of Sales.  Ms. Friske also provides services on an
as-needed basis for an affiliate of the Company, Stevia Company, Inc.  Ms.
Friske received her Bachelor of Science degree in May, 1981 from Eastern
Illinois University where she majored in Personnel Management.

<PAGE>

LAURENCE MEAD, Vice President - Manufacturing and Manager of Financial and
Product Development.  Mr. Mead joined the production department of the
Company in 1980, and has served as the Company's Production Manager since
1984.  In April, 1994, Mr. Mead was appointed Vice President - Manufacturing
and Manager of Financial and Product Development.  Mr. Mead received his
Bachelor of Science degree in August, 1992 from Roosevelt University where he
majored in Accounting.

LAUANE C. ADDIS, Secretary, Corporate Counsel, and Director.  Mr. Addis is
currently a member of the law firm Katz, Karacic, Helmin & Addis, P.C.,
Chicago, Illinois.  Mr. Addis served the Company from February, 1984 to June,
1991 as its Vice President - Finance and Chief Financial Officer on a part-
time basis and was employed in the equivalent capacity on a part-time basis
by Stevia Company, Inc., an affiliate of the Company.  From December, 1985
thru June, 1991, Mr. Addis also served as Executive Vice President, Chief
Operating Officer, Chief Financial Officer, and Treasurer of the Company.  In
July, 1991, Mr. Addis resigned from these positions to return to the full-
time private practice of law.  Mr. Addis is also the Secretary and a director
of Stevia Company, Inc. and an officer and director of FKSI, an affiliate of
the Company. Mr. Addis graduated from Andrews University with a B.A. in
History and Business Administration in June, 1978.  He received his Doctor of
Jurisprudence from Baylor University in 1981 and his Master of Laws in
Taxation from the University of Denver in 1982.  Mr. Addis is a member of the
Colorado, Illinois and Texas Bar Associations.

JAMES F. SCHEMBRI, Director.  Mr. Schembri was elected to the Board of
Directors on November 15, 1990.  Mr. Schembri is the founder and President of
Schembri & Associates (formerly Automatic Controls Company).  This company
was a manufacturer's representative with offices in Michigan, Ohio and
Kentucky.  It currently is involved in specialized lending situations with
Equity Funding, Inc. of West Bloomfield, Michigan.  Mr. Schembri is one of
the founders and President of Fenton Systems, Inc., Burton, Michigan.  In
addition to these activities, Mr. Schembri is founder and President of
Wickfield Leasing Company, which leases automobiles and office equipment.
Mr. Schembri is a director of Stevia Company, Inc., an affiliate.  Mr.
Schembri received his Bachelor of Science Degree in Mechanical Engineering
from the University of Detroit in June, 1957.

Item 11. Executive Compensation.

The following summary compensation table sets forth a summary of compensation
for services in all capacities to the Company during the fiscal years ended
April 30, 1998, 1997 and 1996 paid to the Chief Executive Officer.  None of
the Company's other executive officers received annual salaries and bonuses
for such fiscal years exceeding $100,000.
<PAGE>

<TABLE>

                             Summary Compensation Table      
               Annual Compensation             Long Term Compensation/Awards
<CAPTION>
     
 Name and                           Other 
 Principal                          Annual                        All Other
 Position    Year    Salary  Bonus  Compensation (1) Options (2) Compensation
 --------    -----   ------  -----  ------------     -------     ------------
<S>         <C>     <C>      <C>    <C>              <C>         <C>
 Fred K.
   Suzuki    1998   $60,770    -        -               -              -     
 President,  1997   $56,827    -        -               -              -
 Chairman of 1996   $47,525    -       (3)              -          $1,342 (4)
 the Board and
 Chief Executive
 Officer

-----------------
<FN>
 (1) No executive officer received perquisites in excess of the lesser of
$50,000 or 10% of the
aggregate of such officer's salary and bonus.

(2) See "Stock Options" below.

(3) In addition, salary of $5,000 was accrued but not paid during Fiscal 1996.

(4) Interest on loans made by Mr. Suzuki to the Company, aggregating $1,342,
was paid or accrued in 1996.  See "Certain Relationships and Related Party
Transactions."
</FN>
</TABLE>

All officers and directors are reimbursed for out-of-pocket expenses incurred
in connection with the Company's business.  Messrs.  Suzuki, Addis and
Schembri are not remunerated in their capacities as directors.  See, however,
"Certain Relationships and Related Party Transactions."

The Company does not have any pension or profit sharing plans in effect for
the benefit of its employees, including its officers and directors.  Such
plans may be adopted in the future if deemed in the best interests of the
Company by its Board of Directors.

Stock Options

During Fiscal 1998, no stock options were granted to the Chief Executive
Officer or the Company's four other most highly compensated executive
officers (other than the Chief Executive Officer) whose total annual salary
and bonus for fiscal year 1998 exceeded $100,000, and such officers did not
exercise any options during fiscal year 1998.  The following table sets forth
the aggregate value as of April 30, 1998 of unexercised options held by such
individuals.
<PAGE>

<TABLE>
                            Aggregated Option Exercises in Last Fiscal Year
                                and Fiscal Year-End Option Values
<CAPTION>                                   
                                            Number of         Value of
                                            Unexercised       Unexercised
                                            Options at        in-the-Money
               Shares                       Fiscal Year       Options at
               Acquired                     End (#)           Fiscal Year-End
               on            Value          Exercisable/      Exercisable/
Name           Exercise (#)  Realized ($)   Unexercisable     Unexercisable
------------   ------------  ------------   ---------------   ----------------
<S>            <C>           <C>            <C>               <C>
Fred K.
 Suzuki--           -             -              -                  -
President
and                 -             -           60,000/0 (1)        $0/0
Chairman of
the Board           -             -        3,000,000/0 (2)        $0/0
                 
-------------
<FN>

(1)  Effective January 31, 1990, the Company entered into an agreement with
Fred K. Suzuki pursuant to which the Company granted an option to convert all
or a portion of Mr. Suzuki's accrued but unpaid compensation into shares of
the Company's no par value common stock at a conversion rate of $0.05 per
share.  At April 30, 1998, the total deferred compensation payable to
Mr. Suzuki was $3,000, thereby entitling Mr. Suzuki to convert such deferred
compensation into 60,000 shares of the Company's common stock.  This option
has no value in excess of the fairmarket value of the Company's Common Stock.
This option is conditioned upon the Company having sufficient liquid assets
To pay all employee taxes due at the time the conversion.  This option may be
exercised until the optionee is no longer owed accrued but unpaid salary.  The
accrued but unpaid salary arose as a result of Mr. Suzuki's agreement to
defer salary when the Company was not financially able to pay salaries on a
regular basis.  This option contains non-dilutive provisions in the event of
corporate capital reorganizations.

(2)  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 Company's common stock at an option price of $0.025 per
share.  This Stock Option Agreement was granted to Mr. Suzuki in considera-
tion of his loaning money to the Company on an unsecured basis from time to
time.  This option has no value in excess of the fair market value of the
Company's common stock.  The option contains anti-dilutive provisions in the
event of corporate capital reorganizations.  As of April 30, 1998, no portion
of this  Option has been exercised.

</FN>
</TABLE>

Compensation Committee.  The Company does not have a Compensation Committee
of its Board of Directors.  The Board of Directors makes all decisions
concerning the President's compensation including, but not limited to, the
granting of options to acquire common stock of the Company.  The President of
the Company, Fred K. Suzuki, has the sole authority, as granted by the Board
of Directors, to make compensation decisions for other employees of the
Company other than the granting of Options to acquire the common stock of the
Company.

<PAGE>

Item 12.  Security Ownership of Certain Beneficial Owners and Management. 

The following table sets forth information as of April 30, 1998, as to the
voting securities of the Company owned by the officers and directors of the
Company and by each person who owns of record, or is known by the Company to
own beneficially, more than 5% of any class of voting securities.

<TABLE>        
                                        Amount and Nature
                  Name and Address      of Beneficial              Percent of
Title of Class    of Beneficial Owner   Ownership                     Class   
----------------  --------------------  --------------------      ------------
<S>               <C>                   <C>                       <C>         

Common Stock      Fred K. Suzuki         4,497,146 shares             32.57%
                  710 S. Kennicott       of record and
                  Arlington Heights,     beneficial (1)
                  Illinois 60005

Common Stock      F.K. Suzuki Inter-     2,597,146 shares             18.81%
                  national, Inc.         record and bene-
                  1940 E. Devon Ave.     ficial
                  Elk Grove Village, IL
                  60007

Common Stock      Stevia Company, Inc.   1,900,000 shares             13.76%
                  1940 E. Devon Ave.     of record and
                  Elk Grove Village, IL  beneficial (1,2)
                  60007 

Common Stock      Lauane C. Addis        4,506,146 shares             32.64%
                  1819 Orleans Circle    record and bene-
                  Elk Grove Village, IL  ficial (3)
                  60007

Common Stock     James F. Schembri       1,799,500 shares             13.03%
                 19115 W. Eight Mile Rd. of record and
                 Detroit, MI 48219       beneficial (3)

Common Stock     Mary K. Friske (4)      1,000 shares of                .01%
                 940 Bradley Court       record and
                 Palatine, IL 60074      beneficial
                 60194

Common Stock     Laurence C. Mead (5)    1,250 shares of                .01%
                 1151 Warwick Cir. North record and
                 Hoffman Estates IL      beneficial

Common Stock     All directors and       6,307,896                    45.69%
                 officers as a
                 group (5 members)
              
-------------
<FN>
(1)  Fred K. Suzuki is President of F.K. Suzuki International, Inc. ("FKSI")
and owns 35.6% of the outstanding common stock of FKSI.  Mr. Suzuki is also
President and Chairman of the Board of Stevia Company, Inc. ("Stevia") of
which FKSI owns 55.84% of its outstanding common  stock.  Mr. Suzuki does not
personally hold of record any shares of the company's common  stock; however
he is deemed to be beneficial owner by reason of voting and disposition
control 4,497,146 shares which includes 2,597,146 shares which are owned by
FKSI and 1,900,000 shares owned by Stevia.  The above table does not include
an option granted to Mr. Suzuki to convert all or a portion of his deferred
salary into shares of the Company's  common stock at a conversion rate of
$.05 per share, or an option to acquire 3,000,000  shares of the Company's
common stock at $0.025 per share.  See "Executive Compensation" and  "Certain
Relationships and Related Party Transactions."

(2)  Mr. Addis personally owns 9,000 shares of the outstanding Common Stock
of the Company.  In addition, Mr. Addis owns 32.7% of the outstanding Common
Stock of FKSI, which owns 55.84% of the outstanding Common Stock of Stevia
and 18.8% of the Common Stock of the Company.  Mr. Addis is also an officer
and director of Stevia which owns 1,900,000 shares of the Company's Common
Stock.  Mr. Addis is therefore deemed to be beneficial owner by reason of
voting and  disposition control of 2,597,146 shares owned by FKSI, and is
deemed to be the beneficial  owner by reason of voting and disposition
control over 1,900,000 shares owned by Stevia. 

(3)  Included in the shares owned beneficially by Mr. Schembri are 35,000
shares held in Auto Controls Profit Sharing Plan for the benefit of Mr.
Schembri and 508,000 shares owned in joint tenancy with Mr. Schembri's son.

(4)  In addition to the Shares of outstanding common stock of the Company
owned by Mary K. Friske, she also owns 200 shares, or approximately .2%, of
the outstanding common stock of FKSI, which owns 55.84% of the outstanding
common stock of Stevia and 18.8% of the common  stock of the Company.

(5)  In addition to the common stock of the Company owned by Laurence C.
Mead, he also owns 2,900 shares, or approximately 2.9%, of the outstanding
common stock of FKSI, which owns 55.84%  of the outstanding common stock of
Stevia and 18.8% of the common stock of the Company.
</FN>
</TABLE>

Changes in Control

The Company does not know of any arrangements, the operation of which may at
a subsequent date result in a change in control in the Company nor has a
change in the control of the Company occurred during the last fiscal year.

Item 13.  Certain Relationships and Related Party Transactions.

During the fiscal year ending April 30, 1998, the Company shared common
expenses and office space with two affiliates, Stevia Company, Inc.
("Stevia") and F.K. Suzuki International, Inc. ("FKSI").  It is believed by
management that by sharing common areas and office space with Stevia and
FKSI, expenses will be reduced and kept at minimum levels.  It is anticipated
by the Company that they will continue to share common areas and office space
with Stevia and FKSI in the future.  The Company and these affiliates
reimburse each other for such common expenses as appropriate.  As of April
30, 1998, Stevia owed $298,335 and FKSI owed $13,221 to the Company in
connection with the shared common expenses.  See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

<PAGE>

Effective January 31, 1990, the Company entered into an agreement with Fred
K. Suzuki, President, pursuant to which the Company granted an option to
convert all or a portion of Mr. Suzuki's accrued but unpaid compensation into
shares of the Company's no par value common stock at a conversion rate of
$0.05 per share.  At April 30, 1998, the total deferred compensation payable
to Mr. Suzuki was $3,000, thereby entitling Mr. Suzuki to convert such
deferred compensation into 60,000 shares of the Company's common stock.  The
option is conditioned upon the Company having sufficient liquid assets to pay
all employee taxes due at the time of conversion.  The option is exercisable
until Mr. Suzuki's is no longer owed accrued salary.  The accrued but unpaid
salary arose as a result of Mr. Suzuki's agreement to defer salary when the
Company was not financially able to pay salaries on a regular basis.  The
option contains non-dilutive provisions in the event of corporate capital
reorganizations.

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 April 30, 1998, no portion of
this option has been exercised.

Lauane C. Addis, Secretary and Director, as a member of the law firm of Katz,
Karacic, Helmin & Addis, P.C., has represented the Company with respect to
the preparation and filing of this Report.  Mr. Addis, and other members of
Katz, Karacic, Helmin & Addis, P.C., perform other legal services for the
Company from time to time, and it is anticipated such services will be
performed by Mr. Addis and other members of Katz, Karacic, Helmin & Addis,
P.C., in the future.  During Fiscal 1998, the Company paid $5,329 in legal
fees to Katz, Karacic, Helmin & Addis, P.C., some of which inured to the
benefit of Mr. Addis in the form of salary and bonuses.  Mr. Addis is an
officer, director and shareholder of the Company, and is also the son-in-law
of Fred K. Suzuki, President and Chairman of the Board of Directors.  See
"Directors and Executive Officers of the Registrant" and "Security Ownership
of Certain Beneficial Owners and Management."

<PAGE>

Except with regard to the above, there were no other material transactions
involving management of the Company or any third party during the last fiscal
year which accrued to the benefit of officers or directors of the Company.


                                 PART IV

Item 14.  Exhibits, Financial Statements Schedules and Reports on Form 8-K

The following financial statements, schedules and exhibits are filed as a
part of this report:

(a) (1) Financial statements.

        Balance sheet for the fiscal years ending April 30, 1997 and 1998.

        Statements of operations for the fiscal years ending April 30,     
        1996, 1997 and 1998.

        Statements of Shareholders' Equity (Deficit) for the fiscal years  
        ended April 30, 1996, 1997 and 1998.

        Statements of Cash Flows of the Company for fiscal years ending    
        April 30, 1996, 1997 and 1998.

        Notes to financial statements.

(a) (2) List of Financial Statement Schedules:

        No financial schedules for the fiscal years ending April 30, 1998,
1997 and 1996 are submitted.

     Except as listed above, there are no financial statement schedules
required to be filed by Item 8 of this Form 10-K except for those otherwise
shown on the financial statements or notes thereto contained in this report.

(b) Reports on Form 8K.  No current reports on Form 8K were filed during the
    last quarter covered by this report.

(c) The Following Exhibits are Filed as a Part of this Report:

      3a.Articles of Incorporation and By-Laws (1)

      4.Instruments Defining the Rights of Security Holders, Including
Indentures - none.

      9.Voting Trust Agreements - none.

     10.  Material Contracts

     (a)  Deferred Compensation Option Agreement, dated January 31,
1990, between the Company and Fred K. Suzuki (2)

      (b)  Stock Option Agreement, dated August 1, 1993, between the
Company and Fred K. Suzuki (3)

      11.Statement Regarding Computation of Earnings Per Share - none.

      12.Statements Regarding Computation of Ratios - none.

      13.  Annual Report to Security Holders - none.

      16. Letter Regarding Change in Certifying Accountants - none.

      18.  Letter Regarding Change in Accounting Principles - none.

      19. Previously Unfiled Documents - none.

      22.  Subsidiaries of Registrant - none.

      23. Published Report Regarding Matters Submitted to Vote of Security
Holders - none.

      24.  Consent of Experts and Counsel - none.

      25. Power of Attorney - none.

<PAGE>

      27.  Financial Data Schedule - P. E-1.

      28. Additional Exhibits - none.

      29. Information From Reports Furnished to State Insurance Regulatory
Agencies.  N/A
              
________________

[FN]
(1)  Incorporated by reference to a Registration Statement filed on Form
S-18 with the Securities and Exchange Commission, 1933 Act Registration
Number 2-83015C, 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.

(2) 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.

(3) Incorporated by reference to the Company's Annual Report on Form 10K for
fiscal year endingApril 30, 1994 filed with the Securities and Exchange
Commission.

<PAGE>



                                 SIGNATURES

Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, duly authorized.

REGISTRANT:  BIOSYNERGY, INC.



---------------------------------------     ----------------
Fred K. Suzuki, Chairman of the                   Date
Board of Directors and President

Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant
in the capacities on the dates indicated.



---------------------------------------    -------------
Fred Suzuki, Chairman of the                   Date
Board of Directors, President,
Treasurer and Chief Accounting
Officer



---------------------------------------    -------------
Lauane C. Addis, Corporate                     Date
Counsel, Secretary and Director

<PAGE>



                                   SIGNATURES


Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, duly authorized.

REGISTRANT:  BIOSYNERGY, INC.


/s/ FRED K. SUZUKI                        JULY 10, 1998
__________________________                ____________    
Fred K. Suzuki, Chairman of the                Date
Board of Directors and President

Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant
in the capacities on the dates indicated.


/s/ FRED K. SUZUKI                        JULY 10, 1998
______________________________________   ______________
Fred K. Suzukii, Chairman of the               Date
Board of Directors, President,
Treasurer and Chief Accounting
Officer


/s/ LAUANE C. ADDIS                       JULY 10, 1998
______________________________________    _____________          
Lauane C. Addis, Corporate                     Date
Counsel, Secretary and Director

<PAGE>


                               BIOSYNERGY, INC.
                                   
                                   
                                   
                                   
                                   
                              FINANCIAL STATEMENTS
                                   
                                   
                                   
                                   
                                   
               FOR THE YEARS ENDED APRIL 30, 1998, 1997 AND 1996









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


     The accompanying balance sheet of BIOSYNERGY, INC. at April 30, 1998 and
1997, and the related statements of operations, shareholders' equity and cash
flows for the fiscal years ending April 30, 1998, 1997 and 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 years ending April 30, 1998,
1997 and 1996 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.

     The financial statements for the fiscal year ending April 30, 1991 were
examined by the Company's accountants, KPMG Peat Marwick, and they expressed
a qualified opinion on them in their report dated June 7, 1991.  These
opinions were qualified as to the Company's ability to continue as a going
concern.  The Company's accountants have not performed any auditing
procedures since June 7, 1991.






                                 BIOSYNERGY, INC.





July 1, 1998
<PAGE>
<TABLE>

                                  BIOSYNERGY, INC.

                                   BALANCE SHEET
<CAPTION>

                                                      April 30,             
                                               1998            1997     
                                              Unaudited      Unaudited


                                 ASSETS

CURRENT ASSETS
<S>                                           <C>            <C>
    Cash                                      31,150           12,420     
    Accounts Receivable, Trade, Net of
    Allowance for Doubtful Accounts of
     $500 in 1998 and 1997                    75,955           61,030  
    Inventories                               50,148           45,956 
    Prepaid Expenses                           3,792            2,268     
     Total Current Assets                    161,045          121,674     
  Due From Affiliates (Note 3)               311,556          291,795      

  Equipment and Leasehold Improvements:
     Equipment                               170,670         161,320     
    Leasehold Improvements                    15,140          12,216  
                                             185,810         173,536

    Less:  Accumulated Depreciation and
            Amortization                     165,897         163,010     

                                              19,913          10,526     

OTHER ASSETS
  Patents, Net of Accumulated
         Amortization                         22,553          25,533     
    Deposits                                   5,995           6,051     
  Investment in Affiliated Company
        (Note 3)                                -                -   
                                              28,548          31,584     
                                             521,062         455,579     
                                           =========      ==========
<FN>

The accompanying notes are an integral part of the financial statements.
</TABLE>

                                   F-2
<PAGE>
<TABLE>
<CAPTION>
                                                         April 30,       
                                                   1998            1997 
                                                 Unaudited      Unaudited


                     LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
<S>                                              <C>            <C>   
    Accounts Payable                               8,875          12,873    
   Accrued Executive Compensation                 37,355          67,856    
   Other Accrued Compensation                      3,060           2,137
    Accrued Payroll Taxes                            254             791    
     Deferred Rent                                 1,783           1,751    
    Other Accrued Expenses                         1,949           1,736  
      Total Current Liabilities                   53,276          87,144 

COMMITMENTS AND CONTINGENCIES (Note 7)               -               -

SHAREHOLDERS' EQUITY (DEFICIT) (Notes 3 and 5)
  Common Stock, No Par Value, 20,000,000
   Shares Authorized as of April 30, 1997
     and 1998;                               
   13,806,511 Issued and Outstanding
     as of April 30, 1997 and 1998               632,663         632,663
    Additional Paid in Capital                       100             100
                                                (164,977)       (264,328)   
                                                 467,786         368,435
                                                 521,062         455,579    
                                              ----------       ----------
<FN>
       
The accompanying notes are an integral part of the financial statements.
</FN>
</TABLE>
                                F-3 

<PAGE>

<TABLE>
                             BIOSYNERGY, INC.
<CAPTION>

                                        STATEMENT OF OPERATIONS
                                          YEAR ENDED APRIL 30,          

                               1998             1997          1996 
                               Unaudited      Unaudited    Unaudited
                              -----------     ---------    -----------
                                                          
REVENUES
<S>                           <C>             <C>          <C>
    Net Sales                   529,460        502,560        454,784
    Interest Income                 -               54          1,453
     Computer Rentals and Services  600            600            600
    Other Income                  2,860          7,450          2,860
                                532,920        510,664        460,461
COST AND EXPENSES
  Cost of Sales and Other
   Operating Charges            189,398        185,667        162,864
  Research and Development       36,070         32,265         27,995
  Marketing                      51,077         54,075         45,685
  General and Administrative    156,692        149,217        143,293
  Interest Expense                  332            477          2,206
                               ________        _______        _______
                                433,569        421,701        381,044
                               ________        _______        _______

INCOME (LOSS) BEFORE INCOME
   TAXES AND EXTRAORDINARY
       ITEMS                     99,351         88,963         79,417
     INCOME TAXES                29,392         25,104         26,438
INCOME (LOSS) BEFORE
     EXTRAORDINARY ITEMS         69,959         63,859         52,979
EXTRAORDINARY ITEMS
 Reduction of Income Taxes arising from
 Utilization of prior years'- Net            
    Operating Losses (Note 8)    29,392         25,104         26,438
   Write Off Accounts Payable       -              -           12,770
                                 29,392         25,104         39,718
    NET INCOME (LOSS)            99,351         88,963         92,197
                            -----------    -------------      ----------

INCOME (LOSS) PER COMMON SHARE
 (Note 6)
    Before Extraordinary Items    .0027          .0050          .0038
    Extraordinary Items           .0008          .0014          .0028
    NET INCOME (LOSS)             .0072          .0064          .0066
                            -----------    -------------        ---------


WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING           13,806,511      13,806,511     13,806,511 
                            -------------    -------------  -------------- 

<FN>
The accompanying notes are an integral part of the financial statements.
</FN>
</TABLE>

                                      F-4    

<PAGE>
<TABLE>

                                BIOSYNERGY, INC.

                    STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)

                     YEARS ENDED APRIL 30, 1998, 1997 AND 1996
<CAPTION>

                                            
                     Common Stock           Additional
                 ____________________       Paid-In      
                 Shares        Amount       Capital      Deficit     Total
                 ______        ______       __________   _______     ______
<S>             <C>           <C>           <C>          <C>         <C>
BALANCE,
 May 1, 1996
  (Unaudited)    13,806,511    632,663         100      ( 353,291)   279,472
                 -----------   -------      -----------  ---------   -------
NET INCOME           -            -              -         88,963     88,963

BALANCE,
 April 30, 1997  13,806,511    632,663         100      ( 264,328)   368,435
  (Unaudited)    -----------   -------      -----------  ---------   -------

NET INCOME           -            -              -         99,351     99,351

BALANCE,
 April 30, 1998  13,806,511    632,663         100      ( 164,977)   467,786
  (Unaudited)    -----------   -------      ----------- ----------   -------

<FN>

The accompanying notes are an integral part of the financial statements.   
</FN>
</TABLE>


                                F-5
<PAGE>
<TABLE>

                            BIOSYNERGY, INC.

                                               STATEMENTS OF CASH FLOW    

                                                 YEAR ENDED APRIL 30,    
<CAPTION>
                                       1998             1997           1996   
                                       Unaudited      Unaudited    Unaudited
                                       _________      _________    _________

<S>                                    <C>            <C>          <C>
 OPERATING ACTIVITIES:

  Net Income (Loss)
   Adjustments to Reconcile Net
    Cash Provided                       99,351         88,963        92,197  
   By (Used In) Operating Activities:
    Depreciation and Amortization        5,867          5,219         7,063  
   Changes in Assets and Liabilities:
   Accounts Receivable, Net            (14,925)       ( 4,280)        1,402  
  Inventories and Prepaid Expenses     ( 5,716)         2,465       ( 1,609) 
    Accounts Payable and Accrued
  Expenses                             (33,868)       (61,715)      (56,898)
  Net Cash Provided By (Used In)
    Operating Activities                50,709         30,652        42,155  

INVESTING ACTIVITIES:
  Advances to Affiliated Companies
     (Note 3)                          (19,761)       (20,775)      (21,014)
  Purchase of Equipment                (12,274)      (  7,284)         --    
    Deposits                                56             94           360 
  Net Cash Provided By (Used In) Investing
  Activities                           (31,979)       (27,965)      (20,654) 
      
FINANCING ACTIVITIES:
  Net Proceeds from Borrowing
    (Repayments)                          -              -          (16,288) 
  Net Cash Provided By (Used In) Financing
       Activities                         -              -          (16,288) 
  Increase (Decrease) in Cash and Cash
Equivalents                             18,730          2,687         5,213  
 Cash and Cash Equivalents at Beginning
     of Year                            12,420          9,733         4,520  
 Cash and Cash Equivalents at End of
   Year                                 31,150         12,420         9,733   

UPPLEMENTAL DISCLOSURE:
     Cash Paid for Interest                332          2,687         5,231  
                                     ---------      ---------       ---------

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

</FN>
</TABLE>
                                 F-6 
<PAGE>


                            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 April 30, 1998:



                                 F-7
<PAGE>
<TABLE>

                           BIOSYNERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS

<CAPTION>
                  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.
____________                 _________   ___________     _____________ ______
<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, Officer         -              -          35.6%           -
Lauane C. Addis,               
 Officer                        .1%           .1%         32.7%           - 
James F. Schembri,              -           12.9%           -             -
 Director
Mary K. Friske, Officer         -             .1%           .2%           -
Laurence C. Mead, Officer       .1%           .1%          2.9%           -

</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, represent-
ing 19% of the outstanding common stock of the Company, in exchange for
1,058,181 shares of the common stock of Stevia Company, Inc., which was
approximately 4.4%of the then outstanding common stock of Stevia Company,
Inc.  The common stock of Stevia Company, Inc. had no book value at the time
of the exchange and, as a consequence, the Company recorded the exchange at
zero dollar value.

Biosynergy owned 130,403 shares of Stevia Company, Inc. Common Stock at April
30, 1998, representing a .4% interest in Stevia.  Although the Common Stock
of Stevia Company, Inc. is traded in the over-the-counter market, there is no
established public trading market for such Common Stock due to limited and
sporadic trades.  As of April 30, 1998, the bid price of the common stock of
Stevia Company, Inc. was estimated to be $.001 per share.

Common offices are shared with Stevia Company, Inc.  Intercompany charges for
shared expenses are made by whichever company incurs such changes.  Such
intercompany charges, together with funds advanced by Stevia in prior years,
have resulted in the following balances at April 30:

                         April 30, 1998 - $298,335
                         April 30, 1997 - $278,874

At April 30, 1998, the financial condition of Stevia Company, Inc. was such
that it is unlikely to be able to repay Biosynergy during the next year
without liquidating a portion of its assets.

                                 F-8

<PAGE>

                              BIOSYNERGY, INC.
                                   
                      NOTES TO FINANCIAL STATEMENTS


The following balances were due from F.K. Suzuki International, Inc. at April
30:

                               April 30, 1998 - $13,221
                               April 30, 1997 - $12,921

The balances result for an allocation of common expenses offset by advances
received from time to time.  At April 30, 1998, the financial condition of
F.K. Suzuki International, Inc. was such that it unlikely to be able to repay
Biosynergy during the next year without liquidating a portion of its assets.

4.  Inventories:

Components of inventories are as follows:

                                      April 30, 1998    April 30, 1997

        Raw Materials                  $31,789            $30,583         
        Work-in process                 16,049             10,257          
        Finished Goods                   2,310              5,116        
                                      -------------     --------------     
                                       $50,148            $45,956        
                                      -------------     --------------


                                  F-9

<PAGE>


                              BIOSYNERGY, INC.

                       NOTES TO FINANCIAL STATEMENTS


5.  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.

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 the optionee is no longer owed accrued but
unpaid salary.  The accrued but unpaid salary arose as a result of the
individual agreeing to defer salaries when the Company was not financially
able to pay salaries on a regular basis.  The options contain non-dilutive
provisions in the event of corporate capital reorganizations.  At April 30,
1998, an aggregate of 60,000 shares of the Company's common stock was subject
to Mr. Suzuki's option.

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 April 30, 1998, no portion of this
Option has been exercised.






                                  F-10
 


<PAGE>   

                             BIOSYNERGY, INC.

                       NOTES TO FINANCIAL STATEMENTS


6.  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, after giving effect to
stock splits.  The weighted average number of common shares outstanding were
13,806,511 at April 30, 1998, 1997 and 1996.  The affect of conversion of
stock options has not been presented as conversion would be anti-dilutive.

7.  Lease Commitments:

In 1996 the Company entered 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., 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.  Rent expense was
$58,002, $58,002, and $46,784 for the fiscal years ending on April 30, 1998,
1997 and 1996, respectively.  The lease can be extended for an additional
five year term.

8.  Income Taxes:

At April 30, 1998, net operating loss carryforwards were available and
expire, if not used, as follows:

                  Year Ending              Net Operating
                   April 30,                   Losses   
                      1999                     677,671
                      2000                     455,166
                      2001                     449,142
                      2002                     132,470
                      2003                      85,822
                      2004                      41,176
                      2006                         160
                      2007                      28,253  
                                            __________
                                            $1,869,860  
 

                                  F-11

<PAGE>


                              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.

9.  Major Customers:

Shipments to one customer amounted to approximately 31.3% of sales in Fiscal
1998.  At April 30, 1998 there was an outstanding accounts receivable from
this customer of approximately $26,723.

10.  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 to new markets and expand its
marketing efforts in the traditional medical market.  Finally, management
intends to continue pursuing financing opportunities, including selling its
common stock to private investors, if necessary.

11.  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.

       
                                 F-12

<PAGE>

                                                                   
                  SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D.C. 20549
                             FORM 10K

             Annual Report Pursuant to Section 13 or 15(d)

                                 of

                THE SECURITIES AND EXCHANGE ACT OF 1934
                  For the period ending April 30, 1997
                   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 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>