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, 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 May 10, 1999, was 6,413,702.
PART I - FINANCIAL INFORMATION
Vitro Diagnostics, Inc.
Balance Sheets
Assets
(Unaudited) (Audited)
April 30 October 31
1999 1998
Current Assets
Cash Equivalents $ (3,553)$ 0
Accounts Receivable 228,143 128,366
Inventories 399,777 417,343
Prepaid Expense 70,272 63,543
Deposits 15,000
------------ ------------
Total Current Assets 694,638 624,252
------------ ------------
Property, Plant and Equipment
Leasehold Improvements 27,855 12,636
Office Equipment & Furniture 14,793 14,793
Lab & EDP Hardware & SW 139,055 138,477
------------ ------------
Total Cost 181,703 165,906
Less Depreciation (145,381) (139,020)
------------ ------------
Net Property & Equipment 36,322 26,886
------------ ------------
Other Assets
Deposits 12,336 7,336
Inventory - Non Current 51,471 51,471
Intangible Assets 74,954 54,725
Total Other Assets 138,761 113,532
------------ ------------
Total Assets $ 869,721 $ 764,670
============ ============
Vitro Diagnostics, Inc.
Balance Sheets
Liabilities & Stockholders Equity
(Unaudited) (Audited)
April 30 October 31
1999 1998
Current Liabilities
Accounts Payable $ 73,488 $ 85,039
Bank Overdraft - 4,248
Salaries & Wages Payable 150 950
Payroll Taxes Payable 6,803 9,310
Accrued Expenses 2,447 2,447
Notes Payable - Short Term 164,556 154,708
------------ ------------
Total Current Liabilities 247,444 256,702
------------ ------------
Shareholders' Equity
Common Stock: 500,000,000 Shares
Authorized; par $.001;
6,413,702 shares outstanding
at 04/30/99 and 6,413,702
outstanding at 04/30/98 281,001 281,001
Paid in Capital in Excess of Par 3,255,328 3,255,328
Accumulated Deficit (2,914,052) (3,028,361)
------------ ------------
Total Shareholders' Equity 622,277 507,968
------------ ------------
Total Liabilities and
Shareholders' Equity $ 869,721 $ 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 Six Months Ended
April 30, April 30,
1999 1998 1999 1998
-------- --------- --------- --------
Revenue
Product Sales $ 306,154 $ 687,808 $ 628,245 $ 783,908
-------- -------- -------- --------
Gross Revenue 306,154 687,808 628,245 783,908
Cost of Sales
Product 78,209 249,341 201,463 316,333
-------- -------- -------- --------
Total Cost of Sales 78,209 249,341 201,463 316,333
-------- -------- -------- --------
Gross Profit 227,945 438,467 426,782 467,575
Operating Expenses
Selling, General & Administrative 83,275 54,200 159,399 177,663
Research and Development 82,519 19,340 139,372 37,629
-------- -------- -------- --------
Total Expenses 165,794 73,540 298,771 215,292
-------- -------- -------- --------
Gain from Operations 62,151 364,927 128,011 252,283
-------- -------- -------- --------
Other Income (Expense)
Other Income 1,500 2,775 0
Interest Expense (10,260) (9,681) (16,477) (19,227)
-------- -------- -------- --------
Total Other Income and (Expense) (8,761) (9,681) (13,702) (19,227)
-------- -------- -------- --------
Net Gain $ 53,390 $ 355,246 $ 114,309 $ 233,056
======== ======== ======== ========
Gain Per Share of Common Stock
(6,413,702 Shares outstanding
at 04/30/99 and 6,413,702
outstanding at 04/30/98) $ 0.01 $ 0.06 $ 0.02 $ 0.04
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
Vitro Diagnostics, Inc.
Statements of Cash Flows
Six Months Ending 04/30/99 and 98 Twelve Months Ending 10/31/98
<TABLE>
<S> <C> <C> <C>
(Unaudited) (Unaudited) (Audited)
April 30, April 30, October 31,
1999 1998 1998
----------- ----------- ------------
Cash Flows from Operating Activities
Net Income (Loss) $ 114,309 $ 233,056 $ 374,487
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation & Amortization 6,363 7,223 14,897
Expenses Incurred for Stock
Changes in Assets & Liabilities:
Decrease (increase) in-
Accounts Receivable (99,777) (71,011) (22,689)
Inventories 17,566 (39,026) (179,651)
Prepaid Expenses (6,729) 12,423 3,895
Deposits 10,000 - (15,934)
(Decrease) increase in-
Accounts Payable (11,551) (88,111) (84,728)
Salaries & Wages Payable (800) (300) -
Payroll Taxes Payable (2,507) (31,083) (26,338)
Accrued Expenses - - 450
---------- ----------- ----------
Net Cash Provided (Used) by
Operating Activities 26,874 23,171 64,389
---------- ----------- ----------
Cash Flows From Investing Activities
Capital Expenditures (15,798) (5,897) (13,793)
Patents (20,229) (54,725)
---------- ----------- ----------
Net Cash Used by Investing Activities (36,027) (5,897) (68,518)
---------- ----------- ----------
Cash Flows from Financing Activities
Increase in Short Term
Notes Payable 9,848 5,119 7,635
---------- ----------- ----------
Net Cash from Financing Activities 9,848 5,119 7,635
---------- ----------- ----------
Net Increase (Decrease) in Cash 695 22,393 3,506
Cash Beginning (4,248) (7,754) (7,754)
------------ ----------- ----------
Cash Ending $ (3,553) $ 14,639 $ (4,248)
============ =========== ===========
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest $ 17,734 $ 9,681 $ 24,289
============ =========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
Vitro Diagnostics, Inc.
Notes to the Financial Statements
April 30, 1999 (Unaudited)
Basis of Presentation
The information for the six months ended April 30, 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:
04-30-99
------------
Finished Goods $ 307,275
Goods in Process 66,057
Raw Materials 26,445
----------
$ 399,777
==========
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 expires on December 31, 2001. Lease
payments are $4,813 per month until December 31, 1999; $4,933 per month for the
calender year 2000 and $5,054 for the calander year 2001.
NOTE #5: Schedule of Short Term Notes Payable
Issue Interest
Date Rate Balance
Unrelated Party -------- --------- -------
Demand Notes: 01/10/90 20.000% $19,655
06/12/90 14.453% 29,022
Related Party 06/30/95 15.00% 34,979
Corporate COO 06/29/95 15.00% 18,373
Corporate COO 08/04/95 25.00% 10,116
Corporate COO 07/01/97 25.00% 24,697
Corporate CEO,
Demand Note 10/31/95 21.00% 27,714
-------
Total $164,556
=======
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company's Operating Expenses for the second quarter 1999 were
$298,771, the Cost of Sales was $201,463 and Other Income/Expense netted
$13,702. These expenses total $486,532 or 81,089 per month. Gross Revenues
for the second quarter were $628,245 or $104,708 per month. This equates to a
$23,619 gain per month. On April 30, 1999 the Company had $(3,553) in Cash
and $228,143 in Accounts Receivable - Trade for a total of $224,590.
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 1999 to April 1998
The Company's net revenue decreased from 1998. The net gain for the
second quarter 1999 of $53,391 is an decrease of $301,855 from 1998. The
revenue decrease in 1999 was due to decreased sales. In the second quarter of
1998 the Company had a $435,000 sale of a custom product to a large
pharmaceutical company. Working capital at April 30, 1999 amounted to $447,194
which was a $255,101 increase from the $192,093 in working capital at April
30, 1998. An increase in Accounts Receivable - Trade and inventory were
responsible for the change in working capital.
The Company's revenues from product sales (purified antigens) for the
quarter ended April 30, 1999 were $306,154 or 55% less than the $687,808 in
product sales for the quarter ended April 30, 1998.
Total milligram quantities of all products sold for the three months ended
April 30, 1999 equaled 1,026 as compared to 3,812 milligrams sold during the
three months ended April 30, 1998.
Comparison of Six Month Periods April 30, 1999 to April 30, 1998
The net gain for the first six months of 1999 of $114,309 was a decrease
of $118,747 over the $233,056 gain in 1998.
The Company's revenues from product sales for the six months ended April
30, 1999, were $687,808 or 12% less than the $783,908 in product sales for the
six months ended April 30, 1998.
Total milligram quantities of all products sold for the six months ended
April 30, 1999 equaled 2,178 as compared to 4,082 milligrams sold during the six
months ended April 30, 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 May 11, 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 May 11, 1999.
Principal Executive, Financial and Accounting Officer
and Director: /s/ Roger Hurst
Roger Hurst
<PAGE>
May 11, 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 April 30, 1999
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, 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 April 30, 1999 (Unaudited) and the Statement
of Income for the Quarter Ended April 30, 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> Apr-30-1999
<CASH> (3553)
<SECURITIES> 0
<RECEIVABLES> 228143
<ALLOWANCES> 0
<INVENTORY> 399777
<CURRENT-ASSETS> 694638
<PP&E> 181703
<DEPRECIATION> 145381
<TOTAL-ASSETS> 869721
<CURRENT-LIABILITIES> 247444
<BONDS> 0
<COMMON> 281001
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 869721
<SALES> 306154
<TOTAL-REVENUES> 306154
<CGS> 78209
<TOTAL-COSTS> 165794
<OTHER-EXPENSES> 8761
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 53391
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 53391
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
