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, 1998
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 October 27, 1998, was 6,413,702.
PART I - FINANCIAL INFORMATION
Vitro Diagnostics, Inc.
Balance Sheets
Assets
(Unaudited) (Audited)
April 30 October 31
1998 1997
Current Assets
Cash Equivalents $ 14,639 $ -
Accounts Receivable 176,686 105,677
Inventories 276,718 202,019
Prepaid Expense 55,015 67,438
------------ ------------
Total Current Assets 523,058 375,134
------------ ------------
Property, Plant and Equipment
Leasehold Improvements 11,885 11,885
Office Equipment & Furniture 14,480 8,583
Lab & EDP Hardware & SW 131,645 131,645
------------ ------------
Total Cost 158,010 152,113
Less Depreciation (131,346) (124,123)
------------ ------------
Net Property & Equipment 26,664 27,990
------------ ------------
Other Assets
Deposits 6,402 6,402
Inventory - Non Current 51,471 87,144
------------ ------------
Total Other Assets 57,873 93,546
------------ ------------
Total Assets $ 607,595 $ 496,670
============ ============
Vitro Diagnostics, Inc.
Balance Sheets
Liabilities & Stockholders Equity
(Unaudited) (Audited)
April 30 October 31
1998 1997
Current Liabilities
Accounts Payable $ 73,429 $ 161,540
Bank Overdraft - 7,754
Accounts Payable - Officer - 8,227
Salaries & Wages Payable 200 500
Payroll Taxes Payable 4,565 35,648
Accrued Expenses 2,447 2,447
Notes Payable - Short Term 160,417 147,073
------------ ------------
Total Current Liabilities 241,058 363,189
------------ ------------
Shareholders' Equity
Common Stock: 500,000,000 Shares
Authorized; par $.001;
6,413,702 shares outstanding
at 04/30/98 and 6,286,816
outstanding at 04/30/97 281,001 281,001
Paid in Capital in Excess of Par 3,255,328 3,255,328
Accumulated Deficit (3,169,792) (3,402,848)
------------ ------------
Total Shareholders' Equity 366,537 133,481
------------ ------------
Total Liabilities and
Shareholders' Equity $ 607,595 $ 496,670
============ ============
The accompanying notes are an integral part of the financial statements.
<PAGE>
Vitro Diagnostics, Inc.
Statement of Operations
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C>
Three Months Ended Six Months Ended
April 30, April 30,
1998 1997 1998 1997
-------- --------- --------- --------
Revenue
Product Sales $ 687,808 $ 223,004 $ 783,908 $ 407,079
-------- -------- -------- --------
Gross Revenue 687,808 223,004 783,908 407,079
Cost of Sales
Product 249,341 62,027 316,333 119,709
-------- -------- -------- --------
Total Cost of Sales 249,341 62,027 316,333 119,709
-------- -------- -------- --------
Gross Profit 438,467 160,977 467,575 287,370
Operating Expenses
Selling, General & Administrative 54,200 116,216 177,663 213,980
Research and Development 19,340 34,480 37,629 51,477
-------- -------- -------- --------
Total Expenses 73,540 150,696 215,292 265,457
-------- -------- -------- --------
Gain (Loss) from Operations 364,927 10,281 252,283 21,913
-------- -------- -------- --------
Other Income (Expense)
Other Income 1,220 2,420
Interest Expense (9,681) (6,942) (19,227) (15,694)
-------- -------- -------- --------
Total Other Income and Expense (9,681) (5,722) (19,227) (13,274)
-------- -------- -------- --------
Net Gain $ 355,246 $ 4,559 $ 233,056 $ 8,639
======== ======== ======== ========
Gain Per Share of Common Stock
(6,413,702 Shares outstanding
at 04/30/98 and 6,586,816
outstanding at 04/30/97) $ 0.06 $ 0.00 $ 0.04 $ 0.00
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
Vitro Diagnostics, Inc.
Statements of Cash Flows
Six Months Ending 04/30/98 and 97 Twelve Months Ending 10/31/97
<TABLE>
<S> <C> <C> <C>
(Unaudited) (Unaudited) (Audited)
April 30, April 30, October 31,
1998 1997 1997
----------- ----------- ------------
Cash Flows from Operating Activities
Net Income (Loss) $ 233,056 $ 8,639 $ (144,622)
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation & Amortization 7,223 7,467 15,245
Expenses Incurred for Stock 50,500
Changes in Assets & Liabilities:
Decrease (increase) in-
Accounts Receivable (71,011) 10,005 533
Inventories (39,026) (59,032) (54,366)
Prepaid Expenses 12,423 (6,983) 11,107
Deposits - - 1,196
(Decrease) increase in-
Accounts Payable (88,111) 33,786 54,071
Salaries & Wages Payable (300) (6,014) -
Payroll Taxes Payable (31,083) (8,345) 25,771
Accrued Expenses - - (5,514)
---------- ----------- ----------
Net Cash Provided (Used) by
Operating Activities 23,171 (20,477) (46,079)
---------- ----------- ----------
Cash Flows From Investing Activities
Capital Expenditures (5,897) (9,492) (10,619)
Note Receivable Officer - - -
---------- ----------- ----------
Net Cash Used by Financing Activities (5,897) (9,492) (10,619)
---------- ----------- ----------
Cash Flows from Financing Activities
Increase (Decrease) in Short Term
Notes Payable 5,119 16,682 40,728
Increase (Decrease) in Notes Payable, Bank - - (14,130)
---------- ----------- ----------
Net Cash from Investing Activities 5,119 16,682 26,598
---------- ----------- ----------
Net Increase (Decrease) in Cash 22,393 (13,287) (30,100)
Cash Beginning (7,754) 22,346 22,346
------------ ----------- ----------
Cash Ending $ 14,639 $ 9,059 $ (7,754)
============ =========== ===========
Supplimental disclosures of cash flow information
Cash paid during the year for:
Interest $ 9,681 $ 15,694 $ 24,517
============ =========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
Vitro Diagnostics, Inc.
Notes to the Financial Statements
April 30, 1998 (Unaudited)
Basis of Presentation
The information for the six months ended April 30, 1998 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:
04-30-98
------------
Finished Goods $ 196,507
Goods in Process 69,711
Raw Materials 10,500
----------
$ 276,718
==========
Goods in process inventory which is not expected to be completed and sold
in the next fiscal year is classified as non current.
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, 1998, 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
1997 2012 144,445 144,445
---------
$2,008,912
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 #4: LEASE OBLIGATION
The Company's lease at 8100 Southpark Way expired on December 31, 1998.
Lease payments were $4,813 per month. At the present time extended lease
terms have not been negotiated.
NOTE #5: Schedule of Short Term Notes Payable
Issue Interest
Date Rate Balance
Unrelated Party -------- --------- -------
Demand Notes: 01/10/90 20.000% $16,119
06/12/90 14.453% 25,138
Related Party 06/30/95 15.00% 30,135
Corporate COO 06/29/95 15.00% 15,828
Corporate COO 08/04/95 25.00% 7,899
Corporate COO 07/01/97 25.00% 22,627
Corporate CEO,
Demand Note 10/31/95 21.00% 42,671
-------
Total $160,417
=======
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company's Operating Expenses for the second quarter 1998 were
$215,292, the Cost of Sales was $316,333 and Other Income/Expense netted
$19,227. These expenses total $550,852 or $91,809 per month. Gross
Revenues for the first quarter were $783,908 or $130,651 per month. This
equates to a $38,842 gain per month. On April 30, 1998 the Company had
$14,639 in Cash and $176,686 in Accounts Receivable - Trade for a total of
$191,325.
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 April 1998 to April 1997
The Company's net revenue increased from 1997. The net gain for the
second quarter 1998 of $355,246 is an increase of $350,687 from 1997. The
revenue increase in 1998 was due to increased sales. Working capital at
April 30, 1998 amounted to $192,093 which was a $49,560 increase from the
$142,533 in working capital at April 30, 1997. An increase in Accounts
Receivable - Trade and a decrease in Accounts Payable were responsible for the
change in working capital.
The Company's revenues from product sales (purified antigens) for
the quarter ended April 30, 1998 were $687,808 or 308% more than the $223,004
in product sales for the quarter ended April 30, 1997.
Total milligram quantities of all products sold for the three months
ended April 30, 1998 equaled 3,812 as compared to 586 milligrams sold during the
three months ended April 30, 1997.
Comparison of Six Month Periods April 30, 1998 to April 30, 1997
The net gain for the first six months of 1998 of $233,056 was an increase
of $224,417 over the $8,639 gain in 1997.
The Company's revenues from product sales for the six months ended
April 30, 1998, were $783,908 or 93% more than the $407,079 in product sales
for the six months ended April 30, 1997.
Total milligram quantities of all products sold for the six months ended
April 30, 1998 equaled 4,082 as compared to 1,086 milligrams sold during the
six months ended April 30, 1997.
<PAGE>
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
October 27, 1998.
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 October 27, 1998.
Principal Executive, Financial and Accounting Officer
and Director: /s/ Roger Hurst
Roger Hurst
<PAGE>
October 27, 1998
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, 1998
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, 1998 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 April 30, 1998 (Unaudited) and the
Statement of Income for the Quarter Ended April 30, 1998 (Unaudited). It
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Oct-31-1998
<PERIOD-END> Apr-30-1998
<CASH> 14639
<SECURITIES> 0
<RECEIVABLES> 176686
<ALLOWANCES> 0
<INVENTORY> 276718
<CURRENT-ASSETS> 433151
<PP&E> 158010
<DEPRECIATION> 131346
<TOTAL-ASSETS> 607595
<CURRENT-LIABILITIES> 241058
<BONDS> 0
<COMMON> 281001
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 607595
<SALES> 783908
<TOTAL-REVENUES> 783908
<CGS> 316333
<TOTAL-COSTS> 215292
<OTHER-EXPENSES> 19227
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 233056
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 233056
<EPS-PRIMARY> 0.04
<EPS-DILUTED> 0.04
</TABLE>
