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, 1997
OR
( ) 15, TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 0-17378
VITRO DIAGNOSTICS, 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 August 15, 1997, were 6,411,816.
PART I - FINANCIAL INFORMATION
<PAGE>
Vitro Diagnostics, Inc.
Balance Sheets
Assets
(Unaudited) (Audited)
July 31, October 31
1997 1996
Current Assets
Cash Equivalents $ (4,603)$ 22,346
Accounts Receivable 67,584 106,210
Inventories 243,548 183,326
Prepaid Expense 99,772 78,545
----------- -----------
Total Current Assets 406,301 390,427
----------- -----------
Property, Plant and Equipment
Leasehold Improvements 12,414 11,885
Office Equipment & Furniture 17,688 17,688
Lab & EDP Hardware & SW 175,249 165,757
----------- -----------
Total Cost 205,350 195,330
Less Depreciation (174,001) (162,714)
------------ -----------
Net Property & Equipment 31,350 32,616
------------ -----------
Other Assets
Deposits 7,598 7,598
Inventory - Non Current 51,471 51,471
------------ ------
Total Other Assets 59,069 59,069
------------ ------
Total Assets $ 496,720 $ 482,112
============ =========
<PAGE>
Vitro Diagnostics, Inc.
Balance Sheets
Liabilities & Stockholders Equity
(Unaudited) (Audited)
July 31, October 31
1997 1996
Current Liabilities
Accounts Payable $ 143,176 $ 115,696
Salaries & Wages Payable 150 6,014
Payroll Taxes Payable 10,440 9,877
Accrued Expenses 2,447 2,447
Notes Payable - Short Term 154,821 120,475
------------ ----------
Total Current Liabilities 311,034 254,509
------------ ----------
Shareholders' Equity
Common Stock: 500,000,000 Shares
Authorized; par $.001;
6,411,816 shares outstanding
at 07/31/97 and 6,286,816
outstanding at 07/31/96 280,993 280,868
Paid in Capital in Excess of Par 3,254,836 3,204,961
Accumulated Deficit (3,350,143) (3,258,226)
---------- ----------
Total Shareholders' Equity 185,686 227,603
---------- ----------
Total Liabilities and
Shareholders' Equity $ 496,720 482,112
========== ==========
<PAGE>
Vitro Diagnostics, Inc.
Statement of Operations
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C>
Three Months Ended Nine Months Ended
July 31, July 31,
1997 1996 1997 1996
-------- -------- -------- --------
Revenue
Product Sales 115,673 180,802 522,752 542,999
-------- -------- -------- --------
Gross Revenue 115,673 180,802 522,752 542,999
Cost of Sales
Product 83,266 54,344 202,974 156,628
-------- -------- -------- --------
Total Cost of Sales 83,266 54,344 202,974 156,628
-------- -------- -------- --------
Gross Profit 32,407 126,458 319,778 386,371
Operating Expenses
Selling, General & Administrative 113,218 107,482 327,200 252,835
Research and Development 11,887 6,124 63,364 32,441
-------- -------- -------- --------
Total Expenses 125,105 113,606 390,564 285,276
-------- -------- -------- --------
Gain (Loss) from Operations (92,698) 12,852 (70,786) 101,095
-------- -------- -------- --------
Other Income (Expense)
Other Income 800 - 3,220 -
Interest Expense (8,658) (8,723) (24,351) (24,961)
-------- -------- -------- --------
Total Other Income and Expense (7,858) (8,723) (21,131) (24,961)
-------- -------- -------- --------
Net Gain (Loss) $(100,556) 4,129 (91,917) 76,134
======== ======== ======== ========
Gain (Loss) Per Share of Common Stock
(6,411,816 Shares outstanding
at 07/31/97 and 6,286,816
outstanding at 07/31/96) $ (0.02) $ 0.00 $ (0.01) $ 0.01
======== ======== ======== ========
</TABLE>
<PAGE>
Vitro Diagnostics, Inc.
Statements of Cash Flows
Nine Months Ending 07/31/97 Twelve Months Ending 10/31/96
<TABLE>
<S> <C> <C>
(Unaudited) (Audited)
July 31, October 31,
1997 1996
----------- ------------
Cash Flows from Operating Activities
Net Income (Loss) $(91,917) 128,726
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation & Amortization 11,287 17,118
Expenses Incurred for Stock - 49,389
Changes in Assets & Liabilities:
Decrease (increase) in-
Accounts Receivable 38,626 (46,434)
Inventories (60,222) (114,100)
Prepaid Expenses (21,227) (18,400)
Deposits - 292
(Decrease) increase in-
Accounts Payable 27,480 1,656
Salaries & Wages Payable (5,864) -
Payroll Taxes Payable 563 1,434
Accrued Expenses - 5,737
---------- ----------
Net Cash Provided by Operating Activities (101,274) 25,418
---------- ----------
Cash Flows From Investing Activities
Capital Expenditures (10,020) (2,443)
Note Receivable Officer - (150)
---------- ----------
Net Cash Provided by Financing Activities (10,020) (2,593)
---------- ----------
Cash Flows from Financing Activities
Increase (Decrease) in Short Term Notes Payable 34,347 5,702
Increase (Decrease) in Notes Payable, Bank - (15,870)
Proceeds from Issuance of Common Stock 50,000 611
---------- ----------
Net Cash from Investing Activities 84,347 (9,557)
---------- ----------
Net Increase (Decrease) in Cash (26,949) 13,268
Cash Beginning 22,346 9,078
---------- ----------
Cash Ending $ (4,603) 22,346
============ ========
</TABLE>
<PAGE>
Vitro Diagnostics, Inc.
Notes to the Financial Statements
July 31, 1997 (Unaudited)
Basis of Presentation
The information for the nine months ended July 31, 1997 has not been
examined by independent accountants, 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:
07-31-97
------------
Finished Goods $146,548
Goods in Process 97,000
Raw Materials -
----------
$243,548
==========
Goods in process inventory which is not expected to be completed and sold
in the next fiscal year is classified as non current.
<PAGE>
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.
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, 1996, 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 $140,504 $192,530
1989 2004 783,474 783,474
1990 2005 480,296 480,296
1991 2006 21,321 21,321
1995 2010 386,846 386,846
---------
$1,993,421
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.
<PAGE>
Note #4: LEASE OBLIGATION
The Company's lease at 8100 Southpark Way expires on December 31, 1998.
Lease payments are $4,800 per month.
The Company leases its office/warehouse space from a major shareholder of
the Company. Lease payments through December, 1997 were made by issuing
stock for the rents due.
NOTE #5: Schedule of Short Term Notes Payable
Issue Interest
Date Rate Balance
Unrelated Party -------- --------- -------
Demand Notes: 01/10/90 20.000% $13,891
06/12/90 14.453% 22,570
Related Party 06/30/95 15.00% 26,947
Corporate COO 06/29/95 15.00% 14,096
Corporate COO 08/04/95 25.00% 19,495
Corporate CEO 10/31/95 21.00% 57,822
-------
Total $154,821
=======
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company's Operating Expenses for the third quarter 1997 were
$125,106, the Cost of Sales was $83,266 and Other Income/Expense netted
$7,858. These expenses total $216,230 or $72,077 per month. Gross
Revenues for the third quarter were $115,673 or $38,558 per month. This
equates to a $33,519 loss per month. On July 31, 1997 the Company had
($4,603) in Cash and $67,584 in Accounts Receivable - Trade for a total of
$62,981.
Capital is required for new product development. This capital will come
from operating profits or outside investment. Assets will not be sold to
finance expansion. New Product development will be limited by the
availability of capital for expansion.
<PAGE>
Comparison of Three Month Periods July 31, 1997 to July 31, 1996
The Company's net revenue decreased from 1996. The net loss for the
third quarter 1997 of $100,556 is a decrease of $104,685 from 1996. The
revenue decrease in 1997 was due to decreased sales. Working capital at
July 31, 1997 amounted to $95,267 which was a $24,884 decrease from
the $120,151 in working capital at July 31, 1996. An increase in
Accounts Payable and Notes Payable were responsible for the change in
working capital.
The Company's revenues from product sales (purified antigens) for
the quarter ended July 31, 1997 were $115,673 or 36% less than the
$180,802 in product sales for the quarter ended July 31, 1996.
Total milligram quantities of all products sold for the three months
ended July 31, 1997 equaled 299 as compared to 604 milligrams sold during the
three months ended July 31, 1996.
Comparison of Nine Month Periods July 31, 1997 to July 31, 1996
The loss for the first nine months of 1997 of $91,917 was a decrease
of $168,051 over the $76,134 gain in 1996.
The Company's revenues from product sales for the nine months ended
July 31, 1997, were $522,752 or 4% less than the $542,999 in product sales
for the nine months ended July 31, 1996.
Total milligram quantities of all products sold for the nine months
ended July 31, 1997 equaled 1,365 as compared to 1,809 milligrams sold during
the nine months ended July 31, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 r 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
August 26, 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 August 26, 1997.
Principal Executive, Financial and Accounting Officer
and Director: /s/ Roger Hurst
Roger Hurst
<PAGE>
August 26, 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, 1997
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, 1997 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, 1997 (Unaudited) and the
Statement of Income for the Quarter Ended July 31, 1997 (Unaudited). It
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Oct-31-1997
<PERIOD-END> Jul-31-1997
<CASH> (4,603)
<SECURITIES> 0
<RECEIVABLES> 67,584
<ALLOWANCES> 0
<INVENTORY> 243,548
<CURRENT-ASSETS> 406,301
<PP&E> 205,351
<DEPRECIATION> 174,001
<TOTAL-ASSETS> 496,720
<CURRENT-LIABILITIES> 311,034
<BONDS> 0
<COMMON> 280,993
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 496,720
<SALES> 522,752
<TOTAL-REVENUES> 522,752
<CGS> 202,974
<TOTAL-COSTS> 390,564
<OTHER-EXPENSES> 21,131
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (91,917)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (91,917)
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
