CONFORMED COPY
FORM 10-QSB
UNITED STATES
SECURITIES AN 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, 1999
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 August 18, 1999, was 7,318,228.
PART I - FINANCIAL INFORMATION
Vitro Diagnostics, Inc.
Balance Sheets
Assets
(Unaudited) (Audited)
July 31 October 31
1999 1998
Current Assets
Cash Equivalents $ 137,973 $ 0
Accounts Receivable 171,045 128,366
Inventories 512,441 417,343
Prepaid Expense 70,272 63,543
Deposits
15,000
------------ ------------
Total Current Assets 891,731 624,252
------------ ------------
Property, Plant and Equipment
Leasehold Improvements 27,645 12,636
Office Equipment & Furniture 14,793 14,493
Lab & EDP Hardware & SW 140,843 138,477
------------ ------------
Total Cost 183,281 165,906
Less Depreciation (148,987) (139,020)
------------ ------------
Net Property & Equipment 34,294 26,886
------------ ------------
Other Assets
Deposits 12,336 7,336
Inventory - Non Current 51,471 51,471
Patents 95,214
54,725
------------ ------------
Total Other Assets 159,021 113,532
------------ ------------
Total Assets $ 1,085,045 $ 764,670
============ ============
Vitro Diagnostics, Inc.
Balance Sheets
Liabilities & Stockholders Equity
(Unaudited) (Audited)
July 31 October 31
1999 1998
Current Liabilities
Accounts Payable $ 43,052 $ 85,039
Bank Overdraft - 4,248
Salaries & Wages Payable 950
Payroll Taxes Payable 1,285 9,310
Accrued Expenses 2,447 2,447
Notes Payable - Short Term 150,000 154,708
------------ ------------
Total Current Liabilities 196,784 256,702
------------ ------------
Shareholders' Equity
Common Stock: 500,000,000 Shares
Authorized; par $.001;
6,413,702 shares outstanding
at 10/31/98 and 7,318,228
outstanding at 07/31/99 281,942 281,001
Paid in Capital in Excess of Par 3,538,799 3,255,328
Accumulated Deficit (2,932,479) (3,028,361)
------------ ------------
Total Shareholders' Equity 888,261 507,968
------------ ------------
Total Liabilities and
Shareholders' Equity $ 1,085,045 $ 764,670
============ ============
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 Nine Months
Ended
July 31, July 31,
1999 1998 1999
1998
-------- --------- ---------
- --------
Revenue
Product Sales $ 149,368 $ 211,992 $ 777,613 $
995,900
-------- -------- --------
- --------
Gross Revenue 149,368 211,992 777,613
995,900
Cost of Sales
Product 18,695 43,717 220,158
360,050
-------- -------- --------
- --------
Total Cost of Sales 18,695 43,717 220,158
360,050
-------- -------- --------
- --------
Gross Profit 130,674 168,275 557,456
635,850
Operating Expenses
Selling, General & Administrative 67,307 145,293 226,706
322,956
Research and Development 56,634 20,681 193,006
58,310
-------- -------- --------
- --------
Total Expenses 120,940 165,974 419,711
381,266
-------- -------- --------
- --------
Gain from Operations 9,734 2,301 137,745
254,584
-------- -------- --------
- --------
Other Income (Expense)
Other Income 1,650 400
4,425 400
Interest Expense (29,811) (9,612) (46,287)
(28,839)
Penalties Expense (9,147)
- - (9,147) -
-------- -------- --------
- --------
Total Other Income and (Expense) (28,161) (18,359) (41,862)
(37,586)
-------- -------- --------
- --------
Net Gain $ (18,427) $(16,058) $ 95,883 $
216,998
======== ======== ========
========
Gain Per Share of Common Stock
(6,413,702 Shares outstanding
at 07/31/98 and 7,318,228
outstanding at 07/31/99) $ (0.00) $ (0.00) $ 0.01
$ 0.03
======== ======== ========
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
Vitro Diagnostics, Inc.
Statements of Cash Flows
Nine Months Ending 07/31/99 and 98 Twelve Months Ending 10/31/98
<TABLE>
<S> <C> <C> <C>
(Unaudited) (Unaudited)
(Audited)
July 31, July 31,
October 31,
1999 1998 1998
----------- -----------
- ------------
Cash Flows from Operating Activities
Net Income (Loss) $ 95,883 $ 216,998 $
(144,622)
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation & Amortization 9,967
10,886 15,245
Expenses Incurred for Stock -
- - 50,500
Changes in Assets & Liabilities:
Decrease (increase) in-
Accounts Receivable (42,679)
(11,295) 533
Inventories (95,098) (54,475)
(54,366)
Prepaid Expenses (6,729)
10,679 11,107
Deposits 9,998
(12,000) 1,196
Intangible Assets (40,489)
(2,465) -
(Decrease) increase in-
Accounts Payable (41,987)
(95,628) 54,071
Salaries & Wages Payable (950)
- - -
Payroll Taxes Payable (8,025) (30,374)
25,771
Accrued Expenses -
- - (5,514)
---------- -----------
- ----------
Net Cash Provided (Used) by
Operating Activities (120,109) 32,326
(46,079)
---------- -----------
- ----------
Cash Flows From Investing Activities
Capital Expenditures (17,375) (8,592)
(10,619)
---------- -----------
- ----------
Net Cash Used by Financing Activities (17,375)
(8,592) (10,619)
---------- -----------
- ----------
Cash Flows from Financing Activities
Increase (decrease) in Short Term
Notes Payable (4,706)
11,865 40,728
Decrease in Notes Payable, Bank - -
(14,130)
Proceeds from Issuance of Common Stock 284,411 - -
---------- -----------
- ----------
Net Cash from Investing Activities 279,705
11,865 26,598
---------- -----------
- ----------
Net Increase (Decrease) in Cash 142,221 35,599
(30,100)
Cash Beginning (4,248)
(7,754) 22,346
------------ -----------
- ----------
Cash Ending $ 137,973 $ 27,845
$ (7,754)
============ ===========
===========
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest $ 46,287 $ 9,612
$ 24,517
============ ===========
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
Vitro Diagnostics, Inc.
Notes to the Financial Statements
July 31, 1999 (Unaudited)
Basis of Presentation
The information for the nine months ended July 31, 1999 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. Patent expenses will not be amortized until patent is
granted.
If a particular patent is not granted, costs associated with that patent will
be expensed.
Inventories - They are valued at the lower of cost or market using the
first-in first-out method.
Inventories consist of:
07-31-99
------------
Finished Goods $ 342,372
Goods in Process 66,057
Raw Materials 104, 012
----------
$ 512,441
==========
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, 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 $333,034
1989 2004 783,474 192,229 591,245
1990 2005 480,296 480,296
1991 2006 21,321 21,321
1995 2010 386,846 386,846
1997 2012 156,514 156,514
---------
$1,636,222
NOTE #3: Common Stock and Stock Transactions
The net loss or gain 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 or gain per share.
NOTE #4: LEASE OBLIGATION
The Company's lease at 8100 Southpark Way expires on December 31, 2001.
Lease payments are $4,813 per month for calendar year 1999, $4,934 in 2000
and $5,054
in 2001.
NOTE #5: Schedule of Short Term Notes Payable
Issue Interest
Date Rate Balance
Unrelated Party -------- --------- -------
Bank One Note: 06/28/99 8.500% $150,000
----------
Total $150,000
=======
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company's Operating Expenses for the third quarter 1999 were
$120,940, the Cost of Sales was $18,695 and Other Income/Expense netted
$28,161. These expenses total $167,796 or $55,932 per month. Gross
Revenues for the third quarter were $149,368 or $49,789 per month. This
equates to a $6,143 loss per month. On July 31, 1999 the Company had
$137,973 in Cash and $171,045 in Accounts Receivable - Trade for a total of
$309,018.
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. The Company did obtain two loans totaling $400,000
from Bank One. $150,000 is a loan for four years and $250,000 is a yearly line
of credit.
Comparison of 3 Month Periods July 31, 1999 to July 31, 1998
The Company's net revenue decreased from 1998. The net loss for the
third quarter 1999 of $18,427 is a decrease of $2,369 from 1998. The
revenue decrease in 1999 was due to decreased sales. Working capital at
July 31, 1999 amounted to $694,947 which was a $440,503 increase from the
$254,444 in working capital at July 31, 1998. An increase in Cash, Accounts
Receivable-Trade and Inventories were responsible for the change in working
capital.
The Company's revenues from product sales (purified antigens) for
the quarter ended July 31, 1999 were $149,368 or 30% less than the $211,992
in product sales for the quarter ended July 31, 1998.
Total milligram quantities of all products sold for the three months
ended July 31, 1999 equaled 867 compared to 558 milligrams sold during the
three months ended July 31, 1998.
Comparison of Nine Month Periods July 31, 1999 to July 31, 1998
The net gain for the first nine months of 1999 of $95,883 was a
decrease of $121,115 over the $216,998 gain in 1998.
The Company's revenues from product sales for the nine months ended
July 31, 1999, were $777,613 or 22% less than the $995,900 in product sales
for the nine months ended July 31, 1998.
Total milligram quantities of all products sold for the nine months
ended
July 31, 1999 equaled 3,044 as compared to 4,639 milligrams sold during the
nine months ended July 31, 1998.
<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
August 23, 1999.
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 23, 1999.
Principal Executive, Financial and Accounting Officer
and Director: /s/ Roger Hurst
Roger Hurst
<PAGE>
August 23, 1999
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, 1999
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, 1999 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, 1999 (Unaudited) and the
Statement of Income for the Quarter Ended July 31, 1999 (Unaudited). It
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Oct-31-1999
<PERIOD-END> Jul-31-1999
<CASH> 137973
<SECURITIES> 0
<RECEIVABLES> 171045
<ALLOWANCES> 0
<INVENTORY> 512441
<CURRENT-ASSETS> 891731
<PP&E> 183281
<DEPRECIATION> 148987
<TOTAL-ASSETS> 1085045
<CURRENT-LIABILITIES> 196784
<BONDS> 0
<COMMON> 281942
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1085045
<SALES> 149368
<TOTAL-REVENUES> 149368
<CGS> 18695
<TOTAL-COSTS> 120940
<OTHER-EXPENSES> 28161
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (18427)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (18427)
<EPS-BASIC> 0.00
<EPS-DILUTED> 0.00
</TABLE>
