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 April 30, 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 7, 1997, was 6,286,816.
PART I - FINANCIAL INFORMATION
Vitro Diagnostics, Inc.
Balance Sheets
Assets
(Unaudited) (Audited)
April 30 October 31
1996 1995
Current Assets
Cash Equivalents $ 24,763 $ 9,076
Accounts Receivable 81,045 59,776
Inventories 142,923 120,697
Prepaid Expense 65,424 60,145
------------ ------------
Total Current Assets 314,155 249,695
------------ ------------
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 (152,664) (145,596)
------------ ------------
Net Property & Equipment 44,184 47,291
------------ ------------
Other Assets
Deposits 9,585 7,890
Intangible Assets (40) 0
------------ ------------
Total Other Assets 9,545 7,890
------------ ------------
Total Assets 367,884 $ 304,877
======= =======
Vitro Diagnostics, Inc.
Balance Sheets
Liabilities & Stockholders Equity
(Unaudited) (Audited)
April 30 October 31
1996 1995
Current Liabilities
Accounts Payable $ 118,665 $ 105,813
Salaries & Wages Payable 0 0
Payroll Taxes Payable 13,573 8,443
Accrued Expenses 2,724 2,724
Notes Payable - Short Term 112,039 139,020
------------ ------------
Total Current Liabilities 247,001 256,000
------------ ------------
Shareholders' Equity
Common Stock: 500,000,000 Shares
Authorized; par $.001;
6,036,816 shares outstanding
at 04/30/96 and 5,779,816
outstanding at 04/30/95 280,618 280,618
Paid in Capital in Excess of Par 3,155,211 3,155,211
Accumulated Deficit (3,314,946) (3,386,952)
------------ ------------
Total Shareholders' Equity 120,883 48,877
------------ ------------
Total Liabilities and
Shareholders' Equity $ 367,884 304,877
======= =======
Vitro Diagnostics, Inc.
Statement of Operations
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C>
Three Months Ended Six Months Ended
April 30, April 30,
1996 1995 1996 1995
--------- --------- ------- --------
Revenue
Product Sales 185,953 87,932 362,197 207,038
--------- --------- ------- --------
Gross Revenue 185,953 84,932 362,197 207,038
Cost of Sales
Product 58,629 23,750 102,284 88,237
--------- --------- ------- -------
Total Cost of Sales 58,629 23,750 102,284 88,237
--------- --------- ------- -------
Gross Profit 127,324 61,182 259,913 118,801
--------- --------- ------- --------
Operating Expenses
Selling, General & Admin 87,797 108,164 145,351 316,551
Research and Development 12,913 16,611 26,317 45,580
--------- --------- ------- --------
Total Expenses 100,710 108,164 171,668 362,131
--------- --------- ------- --------
Gain (Loss) from Operations 26,614 (46,982) 88,245 (243,330)
--------- --------- ------- --------
Other Income (Expense)
Other Income 24,320
Interest Expense (8,903) (745) (16,239) (1,749)
--------- --------- -------- ---------
Total Other Income & Expense (8,903) 23,575 (16,239) (1,749)
--------- --------- -------- ---------
Net Gain (Loss) $ 17,711 23,407 72,006 (218,382)
======= ====== ====== =======
Gain (Loss) Per Share of Common Stock
(6,036,816 Shares outstanding
at 04/30/96and 5,779,816
outstanding at 04/30/95) $0.01 ($0.01) $0.01 ($0.04)
======== ======= ======== =======
</TABLE>
Vitro Diagnostics, Inc.
Statements of Cash Flows
<TABLE>
<S> <C> <C>
Six Months Twelve Months
Ending 01/31/96 Ending 10/31/95
(Unaudited) (Audited)
April 30, October 31,
1996 1995
------------ ------------
Cash Flows from Operating Activities
Net Income (Loss) $ 72,006 (437,865)
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation & Amortization 7,068 20,572
Write Down of Patents 40 728
Expenses Incurred for Stock 102,424
Changes in Assets & Liabilities:
Decrease (increase) in-
Accounts Receivable (21,269) 47,922
Inventories (22,226) 5,511
Prepaid Expenses (5,279) 592
Deposits (1,695) (3,611)
(Decrease) increase in-
Accounts Payable 12,852 75,512
Payroll Taxes Payable 5,130 1,868
Accrued Expenses 0 277
------------ ------------
Net Cash Provided by Operating Activities 46,627 (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 (26,981) 76,905
Increase (Decrease) in Notes Payable, Bank 30,000
Deferred Offering Costs 38,798
Proceeds from Issuance of Common Stock 30,120
------------ ------------
Net Cash from Investing Activities (26,981) 175,823
------------ ------------
Net Increase (Decrease) in Cash 15,685 (7,372)
Cash Beginning 9,078 16,450
------------ ------------
Cash Ending $ 24,763 9,078
============ ========
</TABLE>
Vitro Diagnostics, Inc.
Notes to the Financial Statements
April 30, 1996 (Unaudited)
Basis of Presentation
The information for the six months ended April 30, 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:
04-30-96
------------
Finished Goods $69,462
Goods in Process 76,461
Raw Materials 0
----------
$142,923
==========
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
Note #3: LEASE OBLIGATION
The Company's lease at 8100 Southpark Way expires on December 31, 1996.
Current lease payments are $4,202 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. The lease payments were made by issuing stock for the rents due.
NOTE #4: Schedule of Short Term Notes Payable
Issue Interest
Date Rate Balance
Unrelated Party ---------- ------------ -----------
Demand Notes: 01/10/90 20.00% $10,841
06/12/90 14.453% 18,860
Related Party 6/30/95 15.00% 22,366
Corporate COO 6/29/95 20.00% 16,278
Corporate CEO,
Demand Note 10/31/95 21.00% 43,694
Total $112,039
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company's Operating Expenses for the first six moths ending April 30, 1996
$171,668, the Cost of Sales was $102,284 and Interest Expense was $16,239.
These expenses total $290,191 or $48,365 per month. Gross Income for this
period $362,197or $60,366 per month. This equates to a $12,001 gain per month.
On April 30, 1996 the Company had $24,763 in Cash and $81,045 in Accounts
Receivable - Trade for a total of $105,808.
Comparison of 3 Month Periods April 1996 to April 1995
The Company's net revenue increased from 1995. The net gain for this quarter
1996 of $54,296 is an increase of $77,700 from 1995. This gain in 1996 was due
to increased product sales. Working capital at April 31, 1996 amounted to
$67,154 which was a $52,500 decrease from the $119,654 in working capital at
April 30, 1995. An increase in Short-Term Notes Payable was responsible for
the change in working capital. These changes to working capital were a direct
result of decreased product sales in 1995.
The Company's revenues from product sales (purified antigens) for the three
months ended April 30, 1996 were $185,953 or 52% more than the $122,106 in
product sales for the three months ended April 30, 1995.
Total milligram quantities of all products sold for the three months ended
April 30, 1996 equaled 638 as compared to 411 milligrams sold during the
three months ended April 30, 1995.
Comparison of Six Month Periods April 1996 to April 1995
The net Gain for the first six months of 1996 of $72,006 was an increase of
$290,388 over the $218,382 loss in 1995.
The company's revenues from product sales for the six months ended April 30,
1996, were 362,197 or 75% more than the $207,038 in product sales for the six
months ended April 30, 1995.
Total milligram quantities of all products sold for the six months ended April
30, 1996 equaled 1,179 as compared to 878 milligrams sold during the six months
ended April 30, 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 13, 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 13, 1997.
Principal Executive, Financial and Accounting Officer
and Director: /s/ Roger Hurst
Roger Hurst
January 13, 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 April 30, 1996
SEC file no. 0-17378
Dear Sir or Madam:
Transmitted herewith through the EDGAR system is Form 10-QSB for the
quarter ended April 30, 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> 32
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Financial Condition at April 30, 1996 (Unaudited) and the
Statement of Income for the Quarter Ended April 30, 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> Apr-30-1996
<CASH> 24,763
<SECURITIES> 0
<RECEIVABLES> 81,045
<ALLOWANCES> 0
<INVENTORY> 142,923
<CURRENT-ASSETS> 314,155
<PP&E> 196,848
<DEPRECIATION> 152,664
<TOTAL-ASSETS> 367,884
<CURRENT-LIABILITIES> 247,001
<BONDS> 0
<COMMON> 280,618
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 367,884
<SALES> 362,197
<TOTAL-REVENUES> 362,197
<CGS> 102,284
<TOTAL-COSTS> 171,668
<OTHER-EXPENSES> 16,239
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 72,006
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 72,006
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
