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, 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 February 26, 1999, was 6,413,702.
<PAGE>
PART I - FINANCIAL INFORMATION
Vitro Diagnostics, Inc.
Balance Sheets
Assets
(Unaudited) (Audited)
January 31 October 31
1999 1998
------------ ----------
Current Assets
Cash Equivalents $ 5,750 $ -
Accounts Receivable 146,984 128,366
Inventories 402,407 417,343
Prepaid Expense 64,544 63,543
Deposits 5,000 15,000
------------ ----------
Total Current Assets 624,685 624,252
------------ ----------
Property, Plant and Equipment
Leasehold Improvements 19,473 12,636
Office Equipment & Furniture 14,793 14,793
Lab & EDP Hardware & SW 138,477 138,477
------------ ----------
Total Cost 172,743 165,906
Less Depreciation (141,989) (139,020)
------------ ----------
Net Property & Equipment 30,754 26,886
------------ ----------
Other Assets
Deposits 7,335 7,336
Patents 54,725 54,725
Inventory - Non Current 51,471 51,471
------------ ----------
Total Other Assets 113,531 113,532
------------ ----------
Total Assets $ 768,970 $ 764,670
============ ==========
2
<PAGE>
Vitro Diagnostics, Inc.
Balance Sheets
Liabilities & Stockholders Equity
(Unaudited) (Audited)
January 31 October 31
1999 1998
------------ ----------
Current Liabilities
Accounts Payable $ 39,791 $ 85,039
Bank Overdraft 4,248
Salaries & Wages Payable 950
Payroll Taxes Payable 285 9,310
Accrued Expenses 2,447 2,447
Notes Payable - Short Term 157,561 154,708
------------ ----------
Total Current Liabilities 200,084 256,702
------------ ----------
Shareholders' Equity
Common Stock: 500,000,000 Shares
Authorized; par $.001;
6,413,702 shares outstanding
at 01/31/99 and 6,413,702
outstanding at 10/31/98 281,001 281,001
Paid in Capital in Excess of Par 3,255,328 3,255,328
Accumulated Deficit (2,967,443) (3,028,361)
------------ ----------
Total Shareholders' Equity 568,886 507,968
------------ ----------
Total Liabilities and
Shareholders' Equity $ 768,970 $ 764,670
============ ==========
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
Vitro Diagnostics, Inc.
Statement of Operations
(Unaudited)
Three Months Ended
January 31,
1999 1998
------------ -------------
Revenue
Product Sales $ 322,091 $ 96,100
------------ ------------
Gross Revenue 322,091 96,100
Cost of Sales
Product 123,254 66,992
------------ ------------
Total Cost of Sales 123,254 66,992
------------ ------------
Gross Profit 198,837 29,108
------------ ------------
Operating Expenses
Selling, General & Admin 76,124 123,463
Research and Development 56,853 18,289
------------ ------------
Total Expenses 132,977 141,752
------------ ------------
Gain (Loss) from Operations 65,860 (112,645)
------------ ------------
Other Income (Expense)
Other Income 1,275
Interest Expense (6,216) (9,546)
------------ -----------
Total Other Income & Expense (4,941) (9,546)
------------ -----------
Net Gain (Loss) $ 60,919 $ (122,190)
============ ===========
Gain (Loss) Per Share of Common Stock
(6,413,702 Shares outstanding
at 01/31/99 and 6,413,702
outstanding at 01/31/98) $ 0.01 $ (0.02)
============ ===========
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Vitro Diagnostics, Inc.
Statements of Cash Flows
Three Months Ending 01/31/99 and 98 Twelve Months Ending 10/31/98
<TABLE>
<S> <C> <C> <C>
(Unaudited) (Unaudited) (Audited)
January 31, January 31, October 31,
1999 1998 1998
----------- ----------- ------------
Cash Flows from Operating Activities
Net Income (Loss) $ 60,919 $ (122,190) $ 374,487
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation & Amortization 2,969 3,611 14,897
Changes in Assets & Liabilities:
Decrease (increase) in-
Accounts Receivable (18,618) 73,546 (22,689)
Inventories 14,936 (70,306) (179,651)
Prepaid Expenses (1,001) 12,423 3,895
Deposits 10,000 - (15,934)
(Decrease) increase in-
Accounts Payable (45,248) (67,351) (84,728)
Deferred Income 305,000 -
Salaries & Wages Payable (950) (250) -
Payroll Taxes Payable (9,025) (4,791) (26,338)
Accrued Expenses - - 450
---------- ---------- ----------
Net Cash Provided (Used) by
Operating Activities 13,982 129,692 64,389
---------- ---------- ----------
Cash Flows From Investing Activities
Capital Expenditures (6,837) (5,897) (13,793)
Patents (54,725)
---------- ---------- ----------
Net Cash Used by Financing Activities (6,837) (5,897) (68,518)
---------- ---------- ----------
Cash Flows from Financing Activities
Increase (Decrease) in Short Term
Notes Payable 2,853 1,078 7,635
---------- ---------- ----------
Net Cash from Investing Activities 2,853 1,078 7,635
---------- ---------- ----------
Net Increase (Decrease) in Cash 9,998 124,873 3,506
Cash (Bank Overdraft) beginning (4,248) (7,752) (7,754)
------------ ---------- ----------
Cash (Bank Overdraft) Ending $ 5,750 $ 117,121 $ (4,248)
============ ========== ===========
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest $ 6,216 $ 9,546 $ 24,289
============ ========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
Vitro Diagnostics, Inc.
Notes to the Financial Statements
January 31, 1999 (Unaudited)
Basis of Presentation
The information for the three months ended January 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. 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:
01-31-99
------------
Finished Goods $ 169,298
Goods in Process 165,432
Raw Materials 67,677
----------
$ 402,407
==========
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.
6
<PAGE>
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, 1999, 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 expires on December 31, 2001.
Lease payments are $5,295 per month.
7
<PAGE>
NOTE #5: Schedule of Short Term Notes Payable
Issue Interest
Date Rate Balance
Unrelated Party -------- --------- -------
Demand Notes: 01/10/90 20.000% $18,704
06/12/90 14.453% 27,998
Related Party 06/30/95 15.00% 33,699
Corporate COO 06/29/95 15.00% 17,701
Corporate COO 08/04/95 25.00% 9,510
Corporate COO 07/01/97 25.00% 23,216
Corporate CEO,
Demand Note 10/31/95 21.00% 26,733
-------
Total $157,561
NOTE #6: Patents and Trademark
The Company presently does not hold any patents. The Company has one
patent application pending with the United States Patent and Trademark Office
concerning a method for the purification of FSH. This same application is
pending in various foreign countries through a PCT filing. The Company holds
a trademark on its logo and phrase "Naturally Pure Antigens". An additional
application concerning immortalization of pituitary cells is now pending with
the United States Patent and Trademark Office.
NOTE #7: Y2K Issues
The Company has a plan in place to assess the risk of "Y2K" problems in
the operation of its business. This includes an examination of all
computer-controlled processing and analytical equipment, the power supply to
the facility, telephone, banking services and water supply to the facility.
The present operating plan calls for completion of the Y2K assessment by June,
1999. Should problem areas be noted, corrective action will be taken to
minimize the disruption of the Company's operation.
8
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company's Operating Expenses for the first quarter 1999 were
$132,977, the Cost of Sales was $123,254 and Other Income/Expense netted
$4,941. These expenses total $261,172 or $87,057 per month. Gross
Revenues for the first quarter were $322,091 or $107,364 per month. This
equates to a $20,307 gain per month. On January 31, 1999 the Company had
$5,750 in Cash and $146,984 in Accounts Receivable - Trade for a total of
$152,734.
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 1999 to January 1998
The Company's net revenue increased from 1998. The net gain for the
first quarter 1999 of $60,919 is an increase of $183,109 from 1998. The
revenue increase in 1999 was due to increased sales. Working capital at
January 31, 1999 amounted to $419,601 which was a $496,460 increase from the
$(76,859)in working capital at January 31, 1998. An increase in inventories
and a decrease in deferred income caused the change in working capital.
The Company's revenues from product sales (purified antigens) for
the quarter ended January 31, 1999 were $322,091 or 335% more than the $96,100
in product sales for the quarter ended January 31, 1998.
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.
9
<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
February 26, 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 February 26, 1999.
Principal Executive, Financial and Accounting Officer
and Director: /s/ Roger Hurst
Roger Hurst
<PAGE>
February 26, 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 January 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 January 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 January 31, 1999 (Unaudited) and the
Statement of Income for the Quarter Ended January 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-31-1998
<PERIOD-END> Jan-31-1999
<CASH> 5750
<SECURITIES> 0
<RECEIVABLES> 146,984
<ALLOWANCES> 0
<INVENTORY> 402407
<CURRENT-ASSETS> 619684
<PP&E> 172743
<DEPRECIATION> 141989
<TOTAL-ASSETS> 768970
<CURRENT-LIABILITIES> 200084
<BONDS> 0
<COMMON> 281001
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 768970
<SALES> 322091
<TOTAL-REVENUES> 322091
<CGS> 123254
<TOTAL-COSTS> 132977
<OTHER-EXPENSES> 4941
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 60919
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 60919
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.00
</TABLE>
