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 January 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 7, 1997, was 6,286,816.
PART I - FINANCIAL INFORMATION
Vitro Diagnostics, Inc.
Balance Sheets
Assets
(Unaudited) (Audited)
January 31 October 31
1996 1995
Current Assets
Cash Equivalents $ 10,366 $ 9,076
Accounts Receivable 100,484 59,776
Inventories 145,044 126,697
Prepaid Expense 65,424 60,146
------------ ------------
Total Current Assets 321,318 249,695
------------ ------------
Property, Plant and Equipment
Leasehold Improvements 11,885 11,885
Office Equipment & Furniture 17,688 17,688
Lab & EDP Hardware & SW 163,314 163,314
------------ ------------
Total Cost 192,887 192,887
Less Depreciation (149,220) (145,596)
------------ ------------
Net Property & Equipment 43,667 47,291
------------ ------------
Other Assets
Deposits 7,890 7,890
Intangible Assets (20) 0
------------ ------------
Total Other Assets 7,870 7,890
------------ ------------
Total Assets 372,855 $ 04,876
======= =======
Vitro Diagnostics, Inc.
Balance Sheets
Liabilities & Stockholders Equity
(Unaudited) (Audited)
January 31 October 31
1996 1995
Current Liabilities
Accounts Payable $ 115,276 $ 105,812
Salaries & Wages Payable 1,600 0
Payroll Taxes Payable 8,376 8,443
Accrued Expenses 2,724 2,724
Notes Payable - Short Term 141,706 139,021
------------ ------------
Total Current Liabilities 269 682 256,000
------------ ------------
Shareholders' Equity
Common Stock: 500,000,000 Shares
Authorized; par $.001;
5,666,240 shares outstanding
at 01/31/95 and 5,290,640
outstanding at 01/31/94 280,618 280,618
Paid in Capital in Excess of Par 3,155,211 3,155,211
Accumulated Deficit (3,332,656) (3,386,953)
------------- ------------
Total Shareholders' Equity 103,173 48,876
------------- ------------
Total Liabilities and
Shareholders' Equity $ 372,855 304,876
======= =======
Vitro Diagnostics, Inc.
Statement of Operations
(Unaudited)
Three Months Ended
January 31,
1996 1995
------------ ------------
Revenue
Product Sales 176,244 87,932
------------ ------------
Gross Revenue 176,244 84,932
Cost of Sales
Product 43,654 23,750
------------ ------------
Total Cost of Sales 43,654 23,750
------------ ------------
Gross Profit 132,590 61,182
------------ ------------
Operating Expenses
Selling, General & Admin 57,553 108,164
Research and Development 13 405 16,611
------------ ------------
Total Expenses 70,958 108,164
------------ ------------
Loss from Operations 61,632 (46,982)
------------ ------------
Other Income (Expense)
Other Income 24,320
Interest Expense (7,336) (745)
------------ ------------
Total Other Income & Expense (7,336) 23,575
------------ ------------
Net Gain (Loss) $ 54,296 23,407
======== ======
Gain (Loss) Per Share of Common Stock
(5,666,240 Shares outstanding
at 01/31/96and 5,666,240
outstanding at 01/31/95) $0.01 ($0.01)
======== =======
Vitro Diagnostics, Inc.
Statements of Cash Flows
Three Months Ending 01/31/96 Twelve Months Ending 10/31/95
(Unaudited) (Audited)
January 31, October 31,
1996 1995
------------ ------------
Cash Flows from Operating Activities
Net Income (Loss) $ 54,296 (437,865)
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation & Amortization 3,624 20,572
Write Down of Patents 20 728
Expenses Incurred for Stock 102,424
Changes in Assets & Liabilities:
Decrease (increase) in-
Accounts Receivable (40,708) 47,922
Inventories (24,347) 5,511
Prepaid Expenses (5,279) 592
Deposits 0 (3,611)
(Decrease) increase in-
Accounts Payable 9,464 75,512
Salaries & Wages Payable 1,600
Payroll Taxes Payable (67) 1,868
Accrued Expenses 0 277
------------ ------------
Net Cash Provided by Operating Activities (1,397) (186,070)
------------ ------------
Cash Flows From Investing Activities
Capital Expenditures 0 (10,292)
Note Receivable Officer 0 13,167
------------ ------------
Net Cash Provided by Financing Activities (2,875)
------------ ------------
Cash Flows from Financing Activities
Increase (Decrease) in Short
Term Notes Payable 2,685 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 2,685 175,823
------------ ------------
Net Increase (Decrease) in Cash 1,288 (7,372)
Cash Beginning 9,078 16,450
------------ ------------
Cash Ending $ 10,366 9,078
============ ========
Vitro Diagnostics, Inc.
Notes to the Financial Statements
January 31, 1996 (Unaudited)
Basis of Presentation
The information for the three months ended January 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. The Company also operated a
clinical laboratory which provided tests and diagnoses for various cancers for
customers throughout the United States. This reference lab operation was
discontinued on 7/31/94.
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:
01-31-96
------------
Finished Goods $29,715
Goods in Process 87,653
Raw Materials 27,676
----------
$145,044
==========
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 15, 1992, the Board of Directors of the Company issued stock options,
which are to be exercised at the market value on May 15, 1992, to Roger Hurst,
Jim Musick and Erik VanHorn. The options are for a period of 10 years. Mr.
Hurst and Dr. Musick were each granted the right to acquire 400,000
"restricted" common shares of the Company. Mr. VanHorn was granted the right
to acquire 200,000 "restricted" common shares of the Company. No options have
been exercised.
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% $9,817
06/12/90 14.453% 17,553
Related Party 6/30/95 15.00% 20,759
Corporate COO 6/29/95 15.00% 10,380
Corporate COO 8/4/95 25.00% 4,255
Corporate CEO,
Demand Note 10/31/95 21.00% 40,565
Total $103,329
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Company's Operating Expenses for the first quarter 1996 were
$70,958, the Cost of Sales was $43,654 and Interest Expense was $7,336.
These expenses total $121,948 or $40,649 per month. Gross Revenues for the
first quarter were $176,24 or $58,748 per month. This equates to a $18,099
gain per month. On January 31, 1996 the Company had $10,366 in Cash and
$100,484 in Accounts Receivable - Trade for a total of $110,850.
Capital is required for the new product development described in
"Description of Business (Item 1). 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.
Comparison of 3 Month Periods January 1996 to January 1995
The Company's net revenue increased from 1995. The net gain for the
first 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 January 31,
1996 amounted to $51,636 which was a $161,934 decrease from the $213,570 in
working capital at January 31, 1995. An increase in Accounts Payable and
Short-Term Notes Payable were 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
quarter ended January 31, 1996 were $176,244 or 48% more than the $84,932 in
product sales for the quarter ended January 31, 1995.
Although the Company is unaware of any major seasonal aspect that would
have a material effect on the financial condition or results of operation, the
first quarter of each fiscal year is always a financial concern. It is not
uncommon for companies to shut down their operation or operate on a skeletal
crew during the Christmas/New Year holiday. Therefore in effect, the first
quarter really has only two months for generating revenue.
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 6, 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 6, 1997.
Principal Executive, Financial and Accounting Officer
and Director: /s/ Roger Hurst
Roger Hurst
January 6, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Vitro Diagnostics, Inc.
Form 10-QSB for the year ending January 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 January 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> 32
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Financial Condition at January 31, 1996 (Unaudited) and the
Statement of Income for the Quarter Ended January 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> Jan-31-1996
<CASH> 10,366
<SECURITIES> 0
<RECEIVABLES> 100,484
<ALLOWANCES> 0
<INVENTORY> 145,044
<CURRENT-ASSETS> 321,318
<PP&E> 192,887
<DEPRECIATION> 149,220
<TOTAL-ASSETS> 372,855
<CURRENT-LIABILITIES> 269,682
<BONDS> 0
<COMMON> 280,618
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 372,855
<SALES> 176,244
<TOTAL-REVENUES> 176,244
<CGS> 43,654
<TOTAL-COSTS> 70,958
<OTHER-EXPENSES> 7,336
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 54,296
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 54,296
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
