CONFORMED COPY
FORM 10-QSB
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) 15, QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended July 31, 1996
OR
( ) 15, TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 0-17378
VITRO DIAGNOSTIC, INC.
______________________________________________________
(Exact name of registrant as specified in its charter)
Nevada 84-1012042
______________________________ _________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8100 Southpark Way, Bldg B-1 , Littleton, Colorado 80120
_________________________________________________________________________
(Address of principal executive offices) (Zip Code)
(303) 794-2000
________________________________________________________________
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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 such shorter
period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for at least the past 90
days.
Yes X No
--- ---
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-QSB or any amendment to this form 10-QSB.
Yes X No
--- ---
The number of shares outstanding of each of the issuer's classes of
common equity as of January 16, 1997, was 6,286,816.
PART I - FINANCIAL INFORMATION
Vitro Diagnostics, Inc.
Balance Sheets
Assets
<TABLE>
<S> <C> <C>
(Unaudited) (Audited)
July 30 October 31
1996 1995
Current Assets
Cash Equivalents $ 12,992 $ 9,076
Accounts Receivable 61,320 59,776
Inventories 199,958 120,697
Prepaid Expense 80,251 60,145
------------ ------------
Total Current Assets 354,521 249,695
------------ ------------
Property, Plant and Equipment
Leasehold Improvements 11,885 11,885
Office Equipment & Furniture 17,688 17,688
Lab & EDP Hardware & SW 167,275 163,314
------------ ------------
Total Cost 196,848 192,887
Less Depreciation (155,618) (145,596)
------------ ------------
Net Property & Equipment 41,230 47,291
------------ ------------
Other Assets
Deposits 13,691 7,890
Intangible Assets (61) 0
------------ ------------
Total Other Assets 13,630 7,890
------------ ------------
Total Assets 409,381 $ 304,877
======= =======
Vitro Diagnostics, Inc.
Balance Sheets
Liabilities & Stockholders Equity
(Unaudited) (Audited)
July 31 October 31
1996 1995
Current Liabilities
Accounts Payable $ 100,617 $ 105,813
Salaries & Wages Payable 150 0
Payroll Taxes Payable 13,448 8,443
Accrued Expenses 2,724 2,724
Notes Payable - Short Term 117,431 139,020
------------ ------------
Total Current Liabilities 234,370 256,000
------------ ------------
Shareholders' Equity
Common Stock: 500,000,000 Shares
Authorized; par $.001;
6,286,816 shares outstanding
at 07/31/96 and 5,779,816
outstanding at 07/31/95 280,868 280,618
Paid in Capital in Excess of Par 3,204,961 3,155,211
Accumulated Deficit (3,310,818) (3,386,952)
------------- ------------
Total Shareholders' Equity 175,011 48,877
------------ ------------
Total Liabilities and
Shareholders' Equity $ 409,381 304,877
======= =======
</TABLE>
Vitro Diagnostics, Inc.
Statement of Operations
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C>
Three Months Ended Nine Months Ended
July 31, July 31,
1996 1995 1996 1995
------------ ------------ -------- --------
Revenue
Product Sales 180,802 66,368 542,999 273,406
------------ ------------ -------- --------
Gross Revenue 180,802 66,368 542,999 273,406
Cost of Sales
Product 54,344 8,353 156,628 96,589
------------ ----------- -------- --------
Total Cost of Sales 54,344 8,353 156,628 96,589
------------ ----------- -------- --------
Gross Profit 126,458 58,015 386,371 176,817
------------ ----------- -------- --------
Operating Expenses
Selling, General & Admin 107,482 105,024 252,835 421,571
Research and Development 6,124 66,217 32,441 111,797
------------- ---------- -------- --------
Total Expenses 113,606 171,241 285,276 533,368
------------- ----------- -------- --------
Gain (Loss) from Operations 12,852 (113,226) 101,095 (356,551)
------------- ----------- -------- --------
Other Income (Expense)
Other Income 1,680 28,377
Interest Expense (8,723) (1,285) (24,961) (3,034)
-------------- --------- --------- --------
Total Other Income & Expense (8,723) 395 (24,961) (25,343)
-------------- ---------- --------- --------
Net Gain (Loss) $ 4,129 (112,831) 76,134 (331,208)
======== ======= ====== =======
Gain (Loss) Per Share of Common Stock
(6,286,816 Shares outstanding
at 07/31/96 and 5,779,816
outstanding at 07/31/95) $0.00 ($0.02) $0.01 ($0.06)
======== ======= ======== =======
</TABLE>
Vitro Diagnostics, Inc.
Statements of Cash Flows
<TABLE>
<S> <C> <C>
Nine Months Twelve Months
Ending 07/31/96 Ending 10/31/95
(Unaudited) (Audited)
July 31, October 31,
1996 1995
------------ ------------
Cash Flows from Operating Activities
Net Income (Loss) $ 76,134 (437,865)
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation & Amortization 10,022 20,572
Write Down of Patents 61 728
Expenses Incurred for Stock 102,424
Changes in Assets & Liabilities:
Decrease (increase) in-
Accounts Receivable (1,544) 47,922
Inventories (79,261) 5,511
Prepaid Expenses (20,106) 592
Deposits (5,801) (3,611)
(Decrease) increase in-
Accounts Payable (13,573) 75,512
Payroll Taxes Payable 5,005 1,868
Salaries and Wages Payable 150
Accrued Expenses 277
------------ ------------
Net Cash Provided by Operating Activities (28,913) (186,070)
------------ ------------
Cash Flows From Investing Activities
Capital Expenditures (3,961) (10,292)
Note Receivable Officer 0 13,167
------------ ------------
Net Cash Provided by Financing Activities (3,961) 2,875
------------ ------------
Cash Flows from Financing Activities
Increase (Decrease) in Short Term
Notes Payable (13,212) 76,905
Increase (Decrease) in Notes Payable, Bank 30,000
Deferred Offering Costs 38,798
Proceeds from Issuance of Common Stock 50,000 30,120
------------ ------------
Net Cash from Investing Activities 36,788 175,823
------------ ------------
Net Increase (Decrease) in Cash 3,914 (7,372)
Cash Beginning 9,078 16,450
------------ ------------
Cash Ending $ 12,992 9,078
============ ========
</TABLE>
Vitro Diagnostics, Inc.
Notes to the Financial Statements
July 31, 1996 (Unaudited)
Basis of Presentation
The information for the nine months ended July 31, 1996 has not been examined
by independent accounts, but includes all adjustments which the Company
considers necessary for a fair presentation of the information presented for
the period.
Note #1 HISTORY OF THE COMPANY
Vitro Diagnostics, Inc. ("The Company") was incorporated under the laws of
the state of Nevada on March 31, 1986, under the name of Imperial Management,
Inc. The Company changed its name to Vitro Diagnostics, Inc. on February 6,
1987.
The Company manufactures specialty diagnostic reagents, viz. purified human
antigens. The Company sells its purified human antigens primarily to
manufacturers of immunodiagnostic test kits.
Note #2: Accounting Policies
The Company is engaged in the development, manufacturing and marketing of
purified antigens. These products are sold domestically and internationally:
the first product was introduced November, 1990.
Accounts Receivable - The Company considers accounts receivable to be fully
collectible; accordingly, no allowance for doubtful accounts was established.
If accounts become uncollectible, they will be charged to operations when that
determination is made.
Depreciation and Amortization - Equipment is stated at lower of cost or
estimated market value and is being depreciated on the straight-line basis
over estimated useful lives of 3 to 10 years. Intangible assets are amortized
on the straight line method per the following: patents, and trademarks 204
months. At October 31, 1995, management determined that patents and
trademarks had no future value and they were written off.
Inventories - They are valued at the lower of cost or market using the first-
in first-out method.
Inventories consist of:
07-31-96
------------
Finished Goods $69,462
Goods in Process 77,633
Raw Materials 52,863
----------
$199,958
==========
Income Taxes - Deferred income taxes arise from the temporary differences
between financial statement and income tax recognition of net operating
losses. A deferred tax asset arising from the net operating loss carryover of
approximately $600,000 has been offset by a valuation allowance.
At October 31, 1995, the Company has unused Federal net
operating loss carry forwards which expire as follows:
Carry Over Expires Original Amount Loss
From F/Y In F/Y Loss Utilized Carryover
----------- ---------- ---------- ---------- ------------
1988 2003 $333,034 $11,550 $321,484
1989 2004 783,474 783,474
1990 2005 480,296 480,296
1991 2006 21,321 21,321
1995 2010 386,84 386,846
-----------
$1,993,421
Cash includes demand deposits at banks.
During the past two years the Company has not had employees who were
compensated for absences.
Use of estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
NOTE #3: Common Stock and Stock Transactions
The net loss per share is based upon the weighted average number of shares
outstanding during the year. Common stock warrants are not included
in the calculation of loss per share
On May 14, 1996 an individual purchased 250,000 shares of Rule 144 Common
Stock for a unit price of $.20
per share or a total price of $50,000.
Note #3: LEASE OBLIGATION
The Company's lease at 8100 Southpark Way expires on December 31, 1996.
Current lease payments are $4,116 per month. At the present time
extended lease terms have not been negotiated.
The Company leases its office/warehouse space from a major shareholder of
the Company.
NOTE #4: Schedule of Short Term Notes Payable
Issue Interest
Date Rate Balance
Unrelated Party ---------- ------------ -----------
Demand Notes: 01/10/90 20.00% $11,392
06/12/90 14.453% 19,550
Related Party 6/30/95 15.00% 23,215
Corporate COO 6/29/95 20.00% 17,168
Corporate CEO,
Demand Note 10/31/95 21.00% 46,106
Total $117,431
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company's Operating Expenses for the first nine months ending July 31,
1996 were $285,276, the Cost of Sales was $156,628 and Interest Expense was
$24,961. These expenses total $466,865 or $51,874 per month. Gross Income
for this period was $542,999 or $60,333 per month. This equates to a $8,459
gain per month. On July 31, 1996 the Company had $12,992 in Cash and $61,320
in Accounts Receivable - Trade for a total of $74,312.
Comparison of 3 Month Periods July 1996 to July 1995
The Company's net revenue increased from 1995. The net gain for this
quarter 1996 of $4,129 is an increase of $116,960 from 1995. This gain in
1996 was due to increased product sales. Working capital at July 31, 1996
amounted to $120,151 which was a $53,906 increase from the $66,245 in working
capital at July 31, 1995. An increase in inventories and accounts receivable
were responsible for the change in working capital. These changes to working
capital were a direct result of increased product sales.
The Company's revenues from product sales (purified antigens) for the three
months ended July 31, 1996 were $180,802 or 172% more than the $66,368 in
product sales for the three months ended July 31, 1995.
Total milligram quantities of all products sold for the three months ended
July 31, 1996 equalled 604 as compared to 175 milligrams sold during the three
months ended July 31, 1995.
Comparison of Nine Month Periods July 1996 to July 1995
The net Gain for the first nine months in 1996 of $76,134 was an increase of
$407,342 over the $331,208 loss in 1995.
The Company's revenues from product sales for the nine months ended July 31,
1996, were 542,999 or 99% more than the $273,406 in product sales for the nine
months ended July 31, 1995.
Total milligram quantities of all products sold for the nine months ended July
31 1996 equalled 1,809 as compared to 1,054 milligrams sold during the nine
months ended July 31, 1995.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Effective October 9, 1996, L. K. Denton and Co., P.C. resigned as the
Registrant's independent accountants. Effective October 9, 1996, the
Registrant hired Larry O'Donnell, CPA, P.C., 2851 South Parker Road, Suite
1040, Aurora, Colorado 80014, (303-745-4545), as their new accounting firm.
There were no adverse opinions, disclaimer of opinions, or modification of
opinion as to uncertainty, audit scopes or accounting principles issued by
such accountant for either of the two most recent years.
The change of accountants was approved by the Registrant's board of directors.
During the two most recent fiscal years there were no disagreements with the
former accountant on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure.
During the two most recent fiscal years the auditors had not advised the
Registrant that the internal controls necessary to develop reliable financial
statements did not exist. Nor have the auditors advised the Registrant that
information had come to their attention that led them to no longer be able to
rely on management's representations, or that had made them unwilling to be
associated with the financial statements.
No information came to the auditor's attention that they would have concluded
materially impacts the fairness or reliability of any previous financial
statement.
The Registrant did not consult with the new auditor for any reason during the
last two fiscal years.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized, on
January 16, 1997.
Vitro Diagnostics, Inc.
(Company)
By: /s/ Roger Hurst
Roger Hurst, President,
Chief Executive Officer
Chief Financial Officer
Chief Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
in the capacities indicated on January 16, 1997.
Principal Executive, Financial and Accounting Officer
and Director: /s/ Roger Hurst
Roger Hurst
January 16, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Vitro Diagnostics, Inc.
Form 10-QSB for the Quarter ending July 31, 1996
SEC file no. 0-17378
Dear Sir or Madam:
Transmitted herewith through the EDGAR system is Form 10-QSB for the quarter
ended July 31, 1996 for Vitro Diagnostics, Inc. Should you have any
questions or comments concerning this matter please contact the undersigned at
303-794-2000.
Sincerely,
Roger Hurst
President
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Financial Condition at July 31, 1996 (Unaudited) and the
Statement of Income for the Quarter Ended July 31, 1996 (Unaudited). It is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Oct-31-1996
<PERIOD-END> Jul-31-1996
<CASH> 12,992
<SECURITIES> 0
<RECEIVABLES> 61,320
<ALLOWANCES> 0
<INVENTORY> 199,958
<CURRENT-ASSETS> 354,521
<PP&E> 196,848
<DEPRECIATION> 155,618
<TOTAL-ASSETS> 409,381
<CURRENT-LIABILITIES> 234,370
<BONDS> 0
<COMMON> 280,868
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 409,381
<SALES> 542,999
<TOTAL-REVENUES> 542,999
<CGS> 156,628
<TOTAL-COSTS> 285,276
<OTHER-EXPENSES> 24,961
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 76,134
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 76,134
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
